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LONDON   BANKING    LIFE. 

PAPERS  ON  TRADE  AND  FINANCE. 


Loan  Bo-ik  No  X|„g  LiniT  10  Day 

LONDON 

N.B. — This  Book  Compfete  Contains.. ....Paget Illustration,     v.u 

BA:b^KII^G-    LIFE. 


PAPERS  ON  TRADE  AND  FINANCE. 


BY 

WILLIAM     PURDY. 


NEW  YOKR: 

LOVELL,  ADAM,  WESSON  &  COMPANY. 
764  Broadway, 


J,     J         J  J  ,.>•.  >»><1>3»' 


LAKE    CHAMPLAIN    PRESS, 
ROUSES    POINT,     N.   Y. 


V  \. 


THESE  COMMENTS  ON 

LONDON  BANKING  LIFE, 

SUGGESTED  BY  THE  REMARKABLE   EVENTS  OF  1875,  HAVING 
ORIGINATED  IN  CONVERSATIONS  WITH 

A  VALUED  FRIEND 

WHEN  ON  HOLIDAY  LEAVE,  BUT  NOW  AGAIN  IN  BUSINESS 

CIRCLES  OF 

AUSTRALIAN  LIFE, 

ARE  TO  HIM  INSCRIBED  AS  A  REMEMBRANCE  OF 

"  The  days  that  grow  to  something  strauge 
In  walking,  as  of  old  we  walked, 
When  we  could  talk  as  once  we  talked, 
Of  men  and  minds,  the  dust  of  change-" 

w.  p. 

May  4th,  1876. 


38S112 


"  The  growth  of  wealth  has  been  such  that  in  the  moral  sphere  it  would 
not  be  too  much  to  call  it  a  revolutionary  change.  There  is  much 
danger  in  the  extraordinary  multiplication  both  of  the  appliances  of 
enjoyment,  through  mechanical  contrivances  of  the  conveniences  of  life, 
and  the  means  of  procuring  them  in  the  increase  of  fortunes  witnessed 
of  late  years.  Progress  of  all  kinds  is  good ;  but  our  instinct  tells  us 
that  there  are  certain  rates  of  progress  which  it  is  necessary  to  observe." 

William  Ewabt  Gladstone. 


"  This  is  the  way  to  lay  the  city  flat ; 

To  bring  the  roof  to  the  foundation  ; 

And  bury  all,  which  yet  distinctly  ranges, 

In  heaps  and  piles  of  ruin." 

Shakespeare. 


CONTENTS. 


CHAPTER  I. 


PAGE 

The  Calm  Before  the  Storm 1 

The  last  Decade  in  Trade — Its  well-defined  Character- 
istics— Strikes — Wars — Collapse  of  French  Empire 
— Commercial  activity — Extension  of  Trade — In- 
crease of  Prices — Great  Movements  of  Capital — The 
new  theory  of  "  Sun-spot  periods." 


CHAPTER  n. 

Commencement  of  the  Crisis 

Dangers  not  foreseen — How  1874  closed  in  depression 
— The  warning  disregarded — Agitation  in  the  Ii'on 
and  Coal  Trades — The  great  failures  that  pceceded 
the  crisis — Fall  of  Discount  Houses. 


CHAPTER  ni. 
Progression  of  Facts 10 

Influence  of  high  prices — Gold  discoveries — Effects  in 
1858-1866,  and  subsequently — Results  of  war  on 
trade  and  finance — Civil  War  in  America — Franco- 
German  War — Great  Produce  Markets. 


4 


Vlll  CONTENTS. 

CHAPTER  IV. 

PAGE 

The  Collapse  of  Collie 22 

Catastrophe  of  the  15th  of  June — The  results  of  reck- 
lessness— Co-operative  Specuhitors — Accommodation 
Bills — Analysis  of  Balance  Sheet — Mansion  House 
examinations — Flight  of  Alexander  Collie — Reward 
for  his  apprehension — Impending  Criminal  Charges. 

CHAPTER  V. 

Losses  by  Banks 29 

Policy  of  Directors — Method  of  treatment — Discount 
Companies — Banks'  Dividends — Public  Opinion. 

CHAPTER  VI. 

Policy  of  Opponents        .......    33 

Press  comments — Attacks  analyzed — Replies  thereto — 
Antagonistic  views — West-End  and  City  Life — 
Change  of  opinion — General  success  of  Banks. 

CHAPTER  VIL 

Critical  Comments 42 

Progress  of  Joint-Stock  Banking — Metropolitan  Banks 
— Scotch  Banks — Irish  Banks — French  method  criti- 
cized— System  of  Deposits — Not  an  evil — Responsi- 
bility not  evaded  —  Classification  of  Scotch  De- 
posits— Adam  Smith's  views — Trade  dependent  on 
Joint  Stock  Banking — The  Australian  System. 

CHAPTER  VIH. 

Banks  on  Self-Improvement 53 

Freedom  in  rates — Bank  of  England  not  obligatory — 
Associated  Banks — "No  Magic"  in  old  regulations 
— Money  at  call — London  and  Westminster  Bank's 
new  rule — Interest  on  current  accounts — P  >wer  of 
good  management. 


CONTENTS.  ix 

CHAPTER  IX. 

PAGE 

Suggestions  for  the  Future  .....  60 
Separation  of  Assets — Division  of  risks — Analyzing 
Deposits — Investments  in  Government  Securities — 
London  and  Westminster  Bank — Bills  of  Exchange 
— Lord  Overstone's  opinions — Bankers'  Acceptances 
Internal  Trade — Good  and  Bad  Bills — Money  Brok- 
ers— Publication  of  Accounts. 

CHAPTER  X. 

Bank  of  England 75 

Advocacy   of    Paper   Currency — Fluctuations   in  the 
value  of  Money — Low  rates  and  depression  of  Trade 
/  — Movements  of  Bullion — Effects   of    Gold   Discov- 

erie.« 


\ 


\ 


CHAPTER  XL 
Stock  Exchange  Influences 81 

Growth   of   Business — New    Undertakings,    1870-5 — 
Their  soundness  or  otherwise — Limited  Liability — 
Returns  of  Joint  Stock  Companies — Gambling  ten- 
dencies— Trade  Speculations — Results  on  Society. 

CHAPTER  Xn. 

American  Failures 94 

Crisis  in  1873 — Statistics  of  Failures — Gain  by  Insol- 
vency— Trade  of  1875 — Nevada  Bank — National 
Gold  Bank — Bank  of  San  Francisco — Bank  of  Cali- 
fornia— Statistics  of  Gold  and  Silver  Pi'oduction — 
Trade  between  California  and  Australia. 

CHAPTER  XIII. 

Canadian  Affairs 104 

Trade  of  1873-4-6— Banking  Returns — Government 
Finance — Savings  Banks — Public  Debt — Check  to 
Prosperity. 


CONTENTS. 


CHAPTER   XIV. 

PAGE 

Australian  Trade  and  Finance  .         .         .         .112 

Continuous  Prosperity — Dangers  to  Importers — Bank- 
ing Statistics — New  South  Wales — Queensland — 
Victoria  —  South  Australia — Tasmania  —  Western 
Australia — Statistics  of  gold  production — Insolven- 
cies in  1874-5. 

/ 

CHAPTER  XV. 
Cape  op  Good  Hope  and  South  Africa    ,         .        .     125 

Diamond  Fields — Banking  system — New  Joint  Stock 
Banks — Their  early  troubles — Statistical  Returns 
— Review  of  Position — Future  Policy. 


CHAPTER  XVI. 

Ships  and  Marine  Insurance 134 

Recent  Experience — Plimsoll's  Agitation — the  Ship- 
owners and  their  friends — Increase  of  Shipping  Pro- 
perty— Decrease  in  the  United  States — The  Wreck 
Register — Sacrifice  of  Human  Lives — Marine  In- 
surance Business — Statistics  of  New  Companies — 
— The  Old  Insurance  Companies — Discussion  as  to 
future  Policy. 

CHAPTER  XVn. 

Continental  Troubles 155 

Baron  Strousberg's  career — His  difficulties — His  fail- 
ure— Troubles  in  Russia — Moscow  Banks — Statis- 
tics of  Banking — Russian  Commerce — Denmark  and 
its  troubles. 


J 


CONTENTS.  XI 


CHAPTER   XVni. 

PAGE 

Bullion  Movements 168 

Gold  Discoveries— Statistics  of  Production— Absorp- 
tion of  Precious  metals — Exportation  of  Silver — 
East  Lidian  Trade— Depreciation  of  Silver— Re- 
shipments  of  Silver  from  the  East — Statistics  of 
Bullion  Trade  to  the  East— Indian  Council  Bills- 
Chevalier  on  the  Precious  Metals— Production  of 
Silver  in  America— Banks  of  France  and  Prussia. 

^  CHAPTER  XIX. 

Foreign  Loans 183 

The  "  Bubbles  "  of  History  and  Romance — Select 
Committee  on  Loans  to  Foreign  States — Mexico — 
Greece  and  Spain— Egypt— Recent  opinions  by  au 
eye-witness — Mr.  Stephen  Cave's  Mission — Stocks 
and  Bonds  in  Default— The  Apologis4;s  of  the  Stock 
Exchange. 

\  CHAPTER  XX. 

Reminiscences  of  Men  and  Manners      .        .        .    195 
Unreasonable  fears — David  Morier  Evans — The  Old 
School — A  Calm  Spectator  and  his  opinions — Types 
in  Men  of  the  "  Rear  Horse  "  of  the  Strand — Uni- 
versal Mammon — Moral  Deductions. 


\ 


[Appendices, 


\ 


XU  CONTENTS. 

APPENDICES. 

PAGE 

A — List  of   Failures  in  1875 206 

B — Stock  Exchange  Curiosities  and  Statistics    .  211 

C— The   United  States  National  Banks  .        .  215 

D — Analysis  of   Stocks  in  Default         .        .         .  216 

E — Stored  Bullion  in   Europe 219 

F — German  Speculations  since  the  War   of  1871-2  220 

G — Turkish  Loans          .        .        .        •        •        .        ■  221 

H— Emigration  in  1875 222 

I — Balance   Sheets  of  Failed  Firms      .        .        .  223 


LONDON  BANKING  LIFE. 


CHAPTER  I. 

THE  CALM  BEFORE  THE  STORM. 

"  The  most  usual  cause  of  general  embarrassment  is  the  recoil  of  prices 
after  they  have  been  raised  by  a  spirit  of  speculation,  intense  in  degree, 
and  exteridlng  to  many  commodities. 

"  The  opening  of  a  new  foreign  market,  or  a  short  supply  of  any  great  arti- 
cles of  commerce,  excites  speculation.  At  periods  of  this  kind,-a  great 
extension  of  credit  takes  place. 

"  All  to  ivhom  the  contagion  reaches,  employ  their  a'edit  much  more  freely 
than  zisual,  and  a  reckless  adventurous  feeling  prevails,  which  dis- 
poses people  to  give  as  well  as  take  credit  more  largely  than  at  other 
times." 

John  Stuart  Mill. 

A  DECADE  in  the  history  of  a  nation  is  always  a 
period  of  importance  for  its  politics  and  commerce. 
In  the  City  it  has  become  natural  to  associate  with  it 
a  season  of  intense  anxiety  ;  fluctuations  in  prosper- 
ity and  prices,  in  the  localities  of  trade  ,  also  in  the 
lives  of  those  who  are  the  actors  in  the  world's 
affairs,  and  of  whom  it  is  certain 

"  They  have  their  exits  aud  their  entrances, 
And  one  man  in  his  time  plays  many  parts." 

The  era  between  1865  and  1875  has  again  shown 
that  commercial  crises  do  not  merely  repeat  them- 
selves.    They  vary  in  origin,  in  character  and  in  re- 


2  LONDON  BANKING  LITE. 

suits  ;  are  each  susceptible  of  different  methods  of 
treatment,  not  to  be  disregarded  either  by  the  student 
or  the  historian.  This  period  at  its  commencement 
was  marked  by  great  prostration  in  the  credit  of 
England  ;  there  had  been  failures  among  banks,  and 
great  financial  houses;  the  bubble  ot  enterprise  by 
limited  joint  stock  companies  had  burst,  leaving  a 
perfect  wreck,  not  only  of  wild  speculations,  but  of 
even  sagacious  and  prudent  undertakings ;  while  the 
safe  investments  of  many  had  been  sacrificed  to  the 
spirit  of  gambling,  and  peace  and  contentment  were 
followed  by  blighted  hopes,  defeated  and  discomfited 
prospects.  It  became  a  subject  of  discussion  whether 
those  who  guided  the  financial  world  would  ever 
again  witness  the  repetition  of  rampant  folly  and 
wickedness ;  if  it  were  within  the  bounds  of  proba- 
bility that  huge  speculations  would  once  more  run 
into  excess  of  riot ;  whether  the  vast  fabric  of  com- 
mercial credit  would  be  shaken  to  its  very  centre,  if 
not  shattered,  by  the  great  failures,  severe  embarrass- 
ments, or  the  absconding  of  any  celebrities  in  business 
circles. 

The  next  two  or  three  years  rolled  onwards  amidst 
gloom,  vicissitude  and  uncertainty.  There  were  the 
slow  and  expensive  windings  up  of  the  disasters  of 
1866  ;  then  came  a  sound  superstructure  of  substan- 
tial work  for  the  artizan ;  afterwards  labor  was  re- 
peatedly on  strike  ;  wars  in  Africa  and  South  America 
followed ;  still  worse,  Europe  was  repeatedly  star- 
tled and  rendered,  suspicious  by  the  small  embroil- 
ments in  Italy,  Austria  and  Luxembourg;  and  at 
last  there  came  the  great  crash  of  empires — that  of 


THE  CALM  BEFORE  THE  STOKM.         3 

France  collapsing,  while  that  of  Germany  assumed 
colossal  proportions,  at  once  determining  the  course 
of  history,  and  perhaps  for  many  succeeding  years 
materially  affecting  the  business,  the  finance  and  the 
enterprise,  not  of  England  merely,  but  of  all  Euro- 
pean nations. 

Throughout  these  events,  there  was  generally  peace 
and  prosperity  for  those  engaged  in  British  commerce. 
In  fact  the  centre  of  trade,  the  pivot  of  finance,  was 
in  London.  It  has  indeed  been  asserted  that  "  in- 
dustrial and  commercial  acti\dty  which  had  at  last 
revived  after  a  long  depression,  extending  over  three 
or  four  years,  was  checked  and  disordered  by  the 
sudden  closing  of  Continental  workshops  and  mar- 
kets." *  The  suspension  of  foreign  competition,  how- 
ever, was  ultimately  beneficial  to  English  producers  ; 
the  progress  of  trade  was  only  slowly  deranged,  al- 
though heavy  losses  were  incurred  by  the  variations 
in  the  value  of  investments.  Railway  traffic  in- 
creased ;  the  public  revenue  maintained  its  elasticity  ; 
there  was  an  undoubted  recovery  of  all  home  trade ; 
besides  a  remarkable  force  in  the  power  over  foreign 
markets,  showing  that  the  neutrality  of  the  nation 
was  the  certain  means  of  fostering  commerce,  stimu- 
lating production,  and  making  England,  for  the  time, 
the  entrepot  of  the  world. 

This  remained  the  condition  of  affairs  throughout 
1871,   and  for  a  large  part  of  1872;  but  then  the 
prices  of  money,  coal,  iron,  and  most  articles  of  pro 
vision  began  to  show  rapid  increases.     There  were 
significant  signs  developed  in  the  great  markets  of 

*Times  Summaiy,  1870,  p.  395. 


4  LONDON  BANKING  LIFE. 

labor ;  wages  had  to  be  generally  increased,  strikes 
became  more  frequent,  and  many  were  the  symptoms 
that  a  new  epoch  had  commenced,  not  unmixed  with 
evil,  and  certainly  presaging  enough  for  all  reflecting 
minds  to  ponder  over,  when  attempting  any  forecast 
of  the  undeveloped  resources  of  the  world,  or  the 
sustaining  energy  of  those  who  follow  the  pursuits  of 
industry. 

There  were  in  the  succeeding  months  spasmodic 
periods  of  repose  and  activity,  of  calm  quietude  and 
rampant  speculation ,  of  ease  and  comfort  in  the 
money  market,  and  then  of  unusual,  indeed  severe, 
stringency.  Those  who  followed  the  "  art  and 
mysterie  "  of  banking  were  often  in  serious,  sedate 
wonderment ;  yet  their  functions  were  legitimately 
performed,  attracting  the  uninvested  capital  of  the 
world,  and  distributing  it  again  throughout  the  ever- 
expanding  surface  of  State  loans  and  trade  discounts ; 
stimulating  new  enterprises,  fostering  home,  colonial 
and  foreign  interests ,  and  finally  heaping  up  almost 
fabulous  profits  for  the  benefit  of  those  inactive 
shareholders  who  are  drones  in  the  hive  of  industry, 
absorbing  everything,  but  yielding  little  or  nothing 
either  in  prudence  or  business. 

It  is  difficult,  perhaps  it  may  be  asserted  with  the 
poet,  "  that  it  were  sad  to  tell  and  long  to  trace  "  all 
the  causes  known  or  supposed  to  contribute  to  the 
crises  to  which  commerce  in  all  civilized  countries  is 
periodically  subject.  It  is  being  gravely  discussed  by 
savants,  whether  they  may  not  be  associated  with 
"  sun-spot  periods,"  a  discussion  to  be  left  with  Pro- 
fessors Balfour,  Stewart  and  Jevons,  who  have  most 


THE  CALM  BEFORE  THE  STORM.         0 

amusingly  raised  the  question  before  the  British 
Association.*  To  those  engaged  in  practical  busi- 
ness, such  discussions  only  allow  a  passing  notice, 
and  it  is  obvious  that  the  facts  connected  with  the 
crisis  of  1875  are  not  referable  to  any  deep  laid  or 
newly  discovered  theories  which  have  their  basis 
either  in  astronomical  science  or  in  political  economy. 
That  a  steady  recurrence  of  commercial  difficulties 
does  occur  is  not  to  be  disputed ;  they  are  not  ex- 
actly decennial ;  rather  of  more  frequent  occurrence, 
and  with  the  enlarging  commerce  of  the  world,  and 
the  increased  facilities  afforded  by  steam  and  tele- 
graphy, these  crises  are  to  be  more  frequently  ex- 
pected. Prices  will  be  kept  in  chronic  agitation,  and 
there  will  be  great  disturbing  causes  in  operation, 
the  consequences  of  which  should  be  watched  al- 
though they  cannot  be  foretold. 

*  The  tract  on  "  The  Science  of  Capital  and  Money,"  by  Mr.  William  West- 
garth,  may  well  be  consulted  for  a  brief  summary  and  the  results  at  present 
arrived  at  by  the  professors. 


LONDON   BANKING  LIFE. 


CHAPTER  11. 

COMMENCEMENT  OF  THE   CRISIS. 

"  Coming  events  cast  their  shadows  before." 


Cabipbell. 


At  the  commencement  of  the  year  1875,  little  warn- 
ing was  given  by  the  press  of  the  "  rocks  ahead ;  "  the 
public  writers,  natural  guardians  of  the  people,  not 
being  endowed  with  any  of  that  "  mystical  lore " 
which  belongs  to  those  who  forecast  events  of  im- 
portance. There  is  remarkable  wisdom  in  the  daily 
record  of  facts ;  but  how  little  to  guide,  in  the 
future,  the  merchant  or  the  banker  !  Sometimes  the 
inviolability  of  great  principles  is  asserted  by  those 
who  maintain  a  stern  independence  against  the  al- 
lurements of  City  Life;  who,  without  prophetic 
power,  show  the  consequences  of  any  departure  from 
sound  proceedings.  But  there  were  no  predictions 
heard,  while  the  seeds  were  being  sown,  of  failures, 
losses  and  frauds.  Indeed,  less  than  ordinary  sagac- 
ity was  manifested,  and,  it  is  worth  remembering, 
that  the  utterances  of  the  press  at  this  eventful 
period  were  rather  the  reverse  of  melancholy  ;  there 
was  elation,  not  depression ;  confidence,  not  doubt 
or  uncertainty.  In  the  review  of  the  year  1874,  there 
are  notable  statements  to  the  following  effect : — 
That  the  magnificent  harvest  with  which  generally 


COMMENCEMENT   OF  THE  CRISIS.  7 

the  whole  world  had  been  blest,  would  prove  a  most 
valuable  aid  to  trade  ! 

The  year  just  vanished  had  been  one  of  even  tenor, 
and  all  classes  had  good  reason  to  be  thankful  for  its 
many  mercies  ! 

After  a  careful  consideration  of  the  character  of 
the  trade,  and  its  results,  the  opinion  was  that  it  ex- 
ceeded in  profits  the  year  preceding  ! 

There  had  been  no  absolute  depression,  but  rather 
a  pause  after  previous  leaps  of  prosperity  ;  and  a  sea- 
son of  reaction  was  not  a  comfortable  time  to  people 
who  have  much  hold  of  business  ! 

There  was  no  reason  to  assume  that  the  existing  de- 
pression was  likely  to  be  more  than  temporary  !  It 
was  not  the  first  occasion  on  which  trade  had  been 
depressed  ;  nor  was  its  contraction  likely  to  be  suc- 
ceeded by  important  consequences.  On  three  differ- 
ent occasions  during  fifteen  years  the  export  trade  of 
the  country  had  suffered  a  severe  decline.  The  first 
of  these  reverses  was  due  to  the  civil  war  in  America ; 
the  second  to  the  crisis  in  1866 ;  the  third  to  the 
reaction  after  the  over-production  and  high  prices  of 
1872. 

Although  wisdom  is  thus  "  conspicuous  by  its  ab- 
sence," there  is  no  wish  to  insist  on  any  sort  of  pre- 
science being  expected,  while  prophecies  in  business 
are  proverbially  unreliable.  It  is  safe,  therefore,  to 
infer  that  dark  or  dreary  occurrences  are  only  known 
after  the  event ;  that  while  premonitory  symptoms 
may  be  furnished,  to  follow  them  is  uncertain  and 
difficult :  experts  may  understand  the  signs  of  the 
times,  fitful  and  erratic  as  they  are,  indeed  for  months 


8  LONDON  BANKING  LIFE. 

or  years  they  give  forth  "  an  uncertain  sound,"  al- 
though at  last  clear,  distinct,  and  reliable. 

It  was  in  this  way  that  the  iron  trade  became  sig- 
nificant in  its  warnings.  After  years  of  extraordinary 
activity,  there  was  an  absence  of  remunerative  results : 
contracted  operations  were  necessary  ;  then  a  reduc- 
tion of  wages,  and  perfect  disorganization  followed. 
In  like  manner,  the  coal  market  was  disturbed ;  the 
consequence  of  many  fluctuations  was  great  inflation, 
and  prosjDcrity  was  succeeded  by  an  equal  amount  of 
depression.  Railway  property  declined.  Money  in  its 
relation  to  trade  underwent  great  oscillations.  And 
at  last,  commerce  declined,  and  capital  became  great- 
ly unhinged. 

The  first  presage  of  trouble  was  in  March,  1875, 
when  Messrs.  I.  C.  Im  Thurn  and  Co.  suspended 
payment  for  not  less  than  .£4,000,000  sterling.  Their 
operations  were  for  the  most  part  in  the  South 
American  trade  ;  merchandise,  exchange  transactions, 
and  steamboat  enterprises  were  combined ;  and  it 
early  became  apparent  that  all  these  departments 
were  unremunerative,  perhaps  had  never  afforded 
profit,  conducted  on  credit,  revolving  about  an  ex- 
panding circle,  and  that  throughout  a  short-lived 
career,  the  firm  exhibited  no  prevision  in  their  ar- 
rangements ;  no  retrospect  of  results ;  no  prudent 
views  of  the  future. 

Be  this  as  it  may,  the  warning  note  was  struck, 
and  in  the  month  of  May,  the  failure  of  Messrs. 
Fothergill,  Hankey  and  Co.,  and  the  Aberdare  and 
Plymouth  Iron  Company  startled  the  financial 
world ;  not  simply  from  the  magnitude  of  the  con- 


COMMENCEMENT   OF   THE   CEISIS.  9 

cerns,  but  from  the  enlargement  of  bill  transactions, 
the  long  series  of  renewals  that  had  been  going  for- 
ward, and  the  extensive  trading  conducted  largely  on 
losing  principles.  There  were  features,  too,  which 
proved  that  discount  houses  had  been  resorted  to,  not 
for  the  purpose  of  short  credit  or  facilities  to  current 
operations,  but  to  raise  capital  for  purchasing  plant, 
machinery,  and  even  the  good-will  of  active  concerns. 
The  natural  consequence  was  that  the  discount 
houses  were  engulphed  in  the  ruin  that  surrounded 
them  ;  the  statement  of  their  affairs  revealed  engage- 
ments wholly  beyond  their  means,  a  huge  system  of 
rediscounting  with  those  banks  which  kept  "open 
doors"  for  their  indiscriminate — often  reckless — 
method  of  business.  The  amazement  of  London  was 
excited  by  finding  millions  of  money  guaranteed  by 
houses  of  almost  mushroom  growth  !  Some  of  the 
bill-brokers  who  suddenly  emerged  into  notoriety 
had  scarcely  been  heard  of  beyond  the  lanes  about 
Lombard  Street,  others  had  too  often  come  to  grief 
not  to  have  a  wide  reputation  ;  yet  all  brought  down 
were  simply  indulging  in  the  folly  of  building  houses 
on  the  sand,  deluding,  not  only  themselves,  but  those 
who  encouraged  their  operations ;  living  on  the  falla- 
cies that  credit  was  capital,  that  there  was  no  limit 
to  the  credulity  of  those  who  repeated  the  cabalistic 
symbols  of  bills,  and  that  the  fabric  of  accommoda- 
tion paper  was  of  eternal  duration  ! 


10  LONDON  BANKING  LIFE. 


CHAPTER  III. 
PROGRESSION  OF  FACTS. 

"Li  these  days  one  must  not  only  live  upon  what  has  been  learnt,  but 
learn  more ;  and  instead  of  sleeping  away  our  acquired  ideas,  we 
should  seek  for  fresh  ones,  make  neiv  opinions  fight  old  ones,  and 
compare  those  of  youth  with  those  of  an  altered  state  of  thought  and 
society."  De  Tocqueville. 

It  is  at  this  stage,  the  threshold  of  the  crisis,  perhaps 
the  culmination  of  greatness  in  trade,  that  the  effect 
of  the  variation  in  prices  may  be  investigated.  The 
survey  is  rarely  extended  over  any  lengthened  period 
of  time,  the  only  true  method  for  gathering  together 
facts  of  importance,  or  for  arriving  at  sound  conclu- 
sions. Even  now,  the  generation  passing  away  ap- 
pears scarcely  conscious  of  the  importance  of  the 
epoch  through  which  they  have  lived  and  toiled  ; 
the  strides  made  in  subduing  the  world  to  man's  use 
and  enjoyment ;  and  the  vast  progress  in  mechanical 
appliances  for  the  development,  and  the  actual 
triumphs  in  material  progress.  It  may,  therefore,  be 
of  some  value  to  remember  that  the  most  notable 
events  within  the  last  twenty-live  years  have  been 
the  gold  discoveries  in  California,  Australia,  and 
New  Zealand;  the  bankruptcies  of  1858  and  1866, 
proceeding  from  one  and  the  same  cause,  although 
differing  in  results  ;  and  lastly  the  great  wars  be- 
tween the  Northern  and  Southern  States  of  America, 


PEOGEESSION   OF   FACTS.  11 

and,  perhaps  of  all  wars  the  most  important,  that  be- 
tween the  French  and  German  Empires.  Each  event 
has  been  followed  by  great  disturbing  elements,  and 
now  that  the  cycle  is  becoming  complete,  it  is  of  es- 
sential importance  to  understand  the  results  for  the 
students  of  commerce  to  profit  by  in  the  future  trans- 
actions of  business. 

Taking,  first,  the  discovery  of  gold,  it  was  clearly 
foreseen  that  the  circulating  medium  of  the  world 
would  not  only  be  greatly  changed,  but  largely  in- 
creased. There  would  be  in  fact  more  money,  either 
in  coin  or  its  representative,  freely  passing  from  one 
country  to  another,  and  there  would  be  also  an  ab- 
sorption of  gold  in  the  great  trading  communities.  In 
fact,  America,  England,  and  France  quickly  became 
possessed  of  a  coinage  unsurpassed  in  quantity  as  in 
quality ;  and  more  recently  a  similar  transformation, 
from  a  debased  to  a  pure  metallic  currency,  has  been 
witnessed  in  Germany.  Another  almost  immediate 
result  from  the  supplies  of  gold  was  the  increase  in 
the  rate  of  wages ;  then  capital  came  still  further  in 
demand ;  rents  increased ;  land  and  house  property 
improved  in  value.  All  this  unquestionably  followed 
from  the  advent  of  the  discoveries  ;  but  there  has  not, 
as  yet,  been  any  close  scrutiny  of  the  effect  of  the 
diminishing  quantity  of  gold  obtained  from  Australia 
or  California.  It  is  full  early  perhaps  to  speculate 
on  this  branch  of  the  subject ;  yet  it  should  be  borne 
in  view,  it  being  impossible  for  bankers  and  mer- 
chants to  overrate  its  importance.  At  present  the 
imports  of  the  precious  metals  into  England  appear 
sufficient  to  maintain  sound  and  convertible  stand- 


12  LOisTDON  BANKING   LIFE. 

ards  for  the  currency  of  civilized  countries,  and  in 
the  language  of  one  of  the  best  statists,  "  The  great 
revolution  pursues  its  course  so  gradually;  it  is 
moderated  and  checked  in  modes  so  infinite  and  sub- 
tle ;  and  moulded  by  influences  too  delicate  to  be 
laid  bare  by  any  appliance  of  statistics  : — that,  so  far 
as  we  can  judge  of  the  future  by  that  which  now  oc- 
curs around  us,  we  may  contemplate  without  fear  a 
change  in  the  economical  condition  of  the  world — 
new  and  startling,  doubtless;  but  already  adjusting 
itself,  without  shocks  or  convulsions,  to  the  expand- 
ing intelligence  and  resources  of  mankind."  * 

The  various  causes  which  accelerated  the  crisis  of 
1858  and  1866,  are  easily  determined.  Speculation 
in  produce  ;  abuse  of  credit ;  accommodation  of  bills  ; 
an  undue  expansion  of  the  foreign  trade  ;  unwieldy, 
unnatural  and  unmanageable  application  of  the 
"  limited  liability "  principle  to  joint  stock  enter- 
prises. It  appears  almost  incredible  that  the  lessons 
of  prudence  should  be  no  sooner  inculcated  than 
forgotten.  Yet  as  each  generation  comes  rapidly 
forward,  it  as  rapidly  produces  some  tyros  in  trade, 
who,  in  their  turn,  despise  warnings,  assert  their 
own  infallibility,  and  are  determined  to  buy  expe- 
rience for  themselves.  Without  moralizing  beyond 
the  subject,  it  is  melancholy  to  reflect,  on  the  wasted 
energies,  the  lost  time,  and  the  bitter  experiences  of 
traders,  speculators,  and  adventurers,  who  "have 
sown  the  wind,  and  shall  reap  in  the  whirlwind," 

»  "  The  New  Supplies  of  Gold,"  by  William  Newmarch.  This  valuable 
tract  was  published  in  1853  ;  but  will  not  its  author  bring  down  his  statistics 
to  a  later  period  ? 


PEOGEESSION   OF   FACTS.  13 

never  realizing  the  harvest  that  follows  from  patience, 
and  the  endurinq;  faith  in  matured  sacjacitv  and 
steady  perseverance.  The  credit  of  England  was 
on  each  occasion  more  heavily  shaken  than  at  any 
period  of  the  present  century  ;  and  so  it  was  predict- 
ed by  those  who  most  laboriously  studied  history. 
Such  may  be  expected  too  in  the  future,  from 
the  ramifications  of  trade  becoming  wider ;  the 
expanding  area  of  financial  oj)erations  ;  the  wonder- 
ful communication  by  steam  and  telegraphy  which 
centres  in  London.  The  consequences  must  be  a 
more  susceptible  sympathy  with  the  world  at  large 
than  has  ever  been  previously  witnessed.  Most  com- 
pletely, indeed,  is  the  statement  of  the  old  writer 
realized,  that  great  interests,  however  conflicting  in 
appearance,  must  "wax  and  wane  together." 

As -war  in  general  is  sufficient  of  itself  to  interfere 
with  prices,  so  the  "  after-glow  "  of  victory  is  dan- 
gerous in  the  extreme  to  trade,  to  finance,  and  the 
adherence  to  sound  principles.  The  proof  was  fur- 
nished throughout  the  United  Kingdom  in  1819 
when  there  were  the  usual  features — "  Importers, 
speculators  and  manufacturers  were  successively 
ruined  by  having  embarked  too  largely  upon  the  an- 
ticipation of  the  maintenance  of  the  former  range  of 
high  prices."  * 

"  The  large  importations  and  eager  speculation 
which  had  gone  on  for  the  greater  part  of  the  pre- 
ceding year,  had  the  effect  of  swelling  the  revenue, 
and  giving  a  semblance  of  extraordinary  prosperity 
to  the  national  finances." 

*  Tookes'  "  History  of  Prices,"  ii.  77. 


14  LONDON   BANKING  LIFE. 

"  Here  and  there,  the  failure  of  a  commercial 
house  was  announced.  First,  the  failures  were  of 
houses  which  nobody  supposed  to  be  very  stable; 
but  presently,  one  firm  after  another  stopped  pay- 
ment. Buying  and  selling  came  almost  to  a  stand ; 
for  the  country  people  looked  at  every  kind  of  bank- 
note as  if  it  would  burn  their  fingers,  and  thought 
they  would  go  home  rather  than  sell  anything  at  all. 
The  run  upon  the  banks  spread  from  district  to 
district ;  and  very  soon  to  London.  Lombard 
Street  was  full  of  men  of  business,  standing  about, 
waiting  to  hear  the  disasters  of  the  day.  It  was  a 
time  to  try  the  faith,  and  courage,  and  generosity  of 
the  rich."  * 

This  condition  of  affairs  has  characterized  most 
periods  when  peace  has  been  restored,  or  when  great 
fluctuations  in  prices  pass  for  a  time  unobserved.  So 
now  that  the  great  American  wars  can  be  critically 
followed  in  their  effects,  it  will  be  found  that  the 
carrying  trade  of  the  world  almost  wholly  passed  to 
British  ship-owners ;  steamers  superseded  sailing 
vessels ;  stock  accumulated  more  quickly  and  heavily 
than  heretofore,  and  for  a  time  an  unusual  stimulus 
was  given  to  English  manufactures.  Again,  the  re- 
sults of  the  Franco-German  war  had  analogous  effects. 
There  was  a  transfer  of  commerce  and  new  ascend- 
encies in  trading  powers ;  productions  in  some  cases 
declined,  in  others  increased;  tendencies  to  extrava- 
gance were  unduly  developed;  self-indulgence  and 
luxury  were  stimulated  ;  yet,  withal,  the  astounding 
effect  of  a  war  expenditure  unparalleled  within  the 

*  Harriet  Martineau's  "  The  Thirty  Years'  Peace,"  i.  209,  358,  359- 


PROGRESSION  OF   FACTS.  15 

last  twenty-five  years,  and  a  strain  upon  the  gold 
supplies  of  the  world  never  previously  witnessed, 
were  disregarded.  "  Signs  and  warnings  "  were  un- 
availing, so  also  were  the  perturbations  of  prices  suf- 
ficient to  affect  almost  every  commodity  required  by 
the  necessities  of  mankind. 

In  thus  enumerating  the  principal  elements  of  dis- 
turbance, it  is  fully  admitted  that  other  causes  have 
operated,  yet  from  these  "  stand  points,"  the  follow- 
ing statistics  may  with  advantage  be  studied. 

[The  following  figures  are  mostly  takeu  from  the  valuable  papers  in  the 
Annual  "  Commercial  History  and  Review,"  published  by  the  Economist, 
which  should  be  regarded,  not  as  a  newspaper,  but  the  vade  mecum  of  every 
well  regulated  counting-house.  In  publishing  the  tables,  the  occasion  may 
properly  be  availed  of  for  expressing  the  acknowledgments  that  must  be 
largely  felt  for  the  laborious  results  which  will  largely  assist  any  who  may  be 
engaged  on  a  future  "  History  of  Prices."] 


16 


LONDON   BANKING  LIFE. 


TEA. 


DATES. 


Congou.     Mid.  Com.  to 
Fair  to  Good. 


Average  for 
six  years. 

1st  January 
1st  July 

1st  January 


1865 
1866 
1867 
1868 
1860 
1870 
1871 
1872 
1873 
1874 
1875 


31st  D 


pcember 


d. 

H 
12 


H 

5 

5 

9 

10 

9 

9i 


Per  lb. 
d. 

12 

15 
13 

to 

a 
a 
(( 
u 
ii 
(( 
u 
a 

« 


d. 
10 
14 

10^ 

28 

32  . 

t( 

a 
a 

11 

12 
13 
12 


WHEAT. 


DATES. 

Gazette  Price. 

Per  quarter. 

,  ^  I  Average  for  > 
1850  i     six  years     i" 

s.      d. 

53    0 

1851     1st  January 

38     1 

1853     1st  July 

44  11 

1857 

63     1 

1858     1st  January 

48    7 

1865 

37  10 

1866 

46    3 

1867 

60    2 

1868 

67    4 

1869             ' 

50  11 

1870 

43     8 

1871 

52    7 

1872            ' 

55    4 

1873 

< 

56    0 

1874 

61     8 

1875 

44    2 

"     31st  December 

44/0  to  52/0       1 

PROGRESSION   OF   FACTS. 


17 


COTTON. 


DATES. 


Surat. 


^^    (  Average  for  ) 

1850  i    ^^^  y^^^'«-    3 

1851  1st  January 
1853     1st  July 
1857 

1858    1st  January 
1865 


1866 
1867 
1868 
1869 
1870 
1871 
1872 
1873 
1874 
1875 


« 

<( 

« 
« 

(( 


31st  December 


Per  lb. 


5d. 


4t        to 


3^ 


"       5| 
to      5 
20d. 
Dhollerah  fair. 

Hid. 

12|rf. 

8irf. 
Q^d. 
Q^d. 
Tid. 
7id. 
6irf. 
6M. 
5id. 


SILK. 


DATES. 


^^    (  Average  for  | 

1850  i  ^^^  y^^^«-  > 

1851  1st  January 

1853  1st  July 

1857 

1858  1st  January 

1865 

1866  •  " 

1867  " 

1868  " 

1869  « 

1870  « 

1871  « 

1872  " 
1873 

1874 

1875  " 

"     31st  December 


Raw  Cossimbazar. 


Per  lb. 
s.     d.  s-    d. 

9     0      to     14    0 


12  0 
17  0 

14  0 
17  0 
19  0 

16  0 

16  6 

17  0 

u 

15  0 

13  6 
11  6 
10  0 

8  0 


17  0 

15  0 
30  0 

22  0 
19  0. 
27  0 

23  0 

21  0 
25  6 

23  0 
25  0 

24  0 

25  6 

22  6 

16  6 
12  6 


18 


LONDON  BANKING   LIFE. 
WOOL. 


South   Australian. 

DATES. 

English 
SoutMown. 

Port  Philip 
Lambs. 

Lambs. 

Locks. 

Per  240  lbs. 

Per  lb. 

Per  lb. 

Per  lb. 

1845) 

to    } 

Average  for    } 

£ 

13 

d.        d. 
12  to  22 

d.       d. 

d.      d. 

7  to  12 

1850) 

SIX  years.     ) 

1851 

1st  January 

14 

18 

.  . 

10  "  14 

1853 

1st  July 

19^ 

17 

.  . 

7  "  17 

1857 

a 

19 

18  to  26 

.  . 

13"  19 

1858 

1st  January 

13 

16  "  21 

.  . 

7  "  16 

1865 

a 

24  to  25 

"    "  27 

15  to  22 

15  "  17 

1866 

« 

21  "  22 

15  "  24 

"   "  20 

1.    u      u 

1867 

(( 

19 

16  "  28 

"    "  22 

14  "  18 

1868 

« 

14* 

14  "  26 

12  "  20 

9  "  13 

1869 

u 

i4 

16  "  23 

10  "  16 

3  "     9 

1870 

(I 

13 

12  »  25 

9  "    " 

((     ((       u 

1871 

(( 

(( 

11  "  22 

8  "  15 

"  "    8 

1872 

" 

21* 

15  "  27 

12  "  19 

7  "  13 

1873 

(( 

23 

18  "  29 

15  "  23 

12  "  19 

1874 

» 

201 

16  "  28 

15  "  22 

8  "  14 

1875 

« 

ISi 

17  "  32 

16  "  26 

11  "  18 

a 

31st  December 

17^ 

18  "  30 

15  "  22 

11  "  14 

TIMBER. 


DATES. 

Dantzic  and  IVIemel. 

Canadian 

Yellow   Pine. 

Per 

load. 

Per  load. 

1845) 
to 

Average  for 

] 

s.    d. 

71    0 

(( 

s. 
81 

d. 
0 

.  s. 
65 

d. 
0 

i( 

s.    d. 

71    0 

1850) 

SIX  years 

1851 

1st  January 

60    0 

a 

70 

0 

55 

0 

(( 

60    0 

1853 

1st  July 

72    0 

(( 

80 

0 

70 

0 

a 

85    0 

1857 

a 

57    0 

(i 

u 

75 

0 

(( 

85    0 

1858 

1st  January 

u 

(( 

85 

0 

70 

0 

a 

75     0 

1865 

it 

60    0 

(( 

85 

0 

60 

0 

a 

75    0 

1866 

ii 

50    0 

(( 

75 

0 

( 

li 

80     0 

1867 

u 

ii 

(( 

a 

n 

«( 

90     0 

1868 

(( 

45    0 

(( 

a 

( 

(( 

i( 

1869 

<( 

40    0 

(( 

80 

0 

70 

0 

<( 

a 

1870 

(( 

u 

a 

(i 

75 

0 

(( 

(.i 

1871 

u 

50    0 

a 

100 

0 

80 

0 

(( 

100    0 

1872 

« 

a 

a 

95 

0 

85 

0 

<( 

105     0 

1873 

« 

50    0 

a 

120 

0 

85 

0 

(( 

105     0 

1874 

u 

60    0 

a 

110 

0 

a 

(C 

n 

1875 

(( 

50    0 

11 

90 

0 

110 

0 

11 

130    0 

(( 

31st  December 

45    0 

<( 

85 

0 

110 

0 

(( 

130    0 

PROGRESSION-  OF  FACTS. 


19 


TALLOW. 


DATES. 

St.  Petersburg,  1st  Y.  C. 

Per  cwt. 

l^f?  Average  for) 

1850)  '^^  y^^^'"-  -> 

s.      d. 

44    0 

1851     1st  January 
1853     1st  July 

1857 

38    0 
49    0 
65    0 

1858     1st  January 
1865 

52    0 
41     0 

1866            " 

49 

1867            « 

44    6 

1868            " 

43    0 

1869            " 

49     0 

1870            « 

46    0 

1871 

45    0 

1872            « 

49    0 

1873            « 

43    0 

1874 

41     0 

1875            " 

47     6 

31st  December 

53    0 

COPPER. 


DATES. 

Tough  Cake. 

Per  ton. 

,      I  Average  for  } 
1850 1    six  years.    1 

£ 

88 

1851     1st  January 

84 

1853     1st  July 

107 

1857 

117 

1858     1st  January 

107 

1865 

89 

1866            " 

106 

1867 

86 

1868            " 

76 

1869            « 

78 

1870            " 

73 

1871             « 

71 

1872            « 

90 

1873 

92^ 

1874            « 

92 

1875 

(( 

31st  December 

88 

20 


LONDON  BANKING  LITE. 


IRON. 


DATES. 

British  Bars. 

Swedish. 

Per  ton. 

Per  ton. 

1845- 
to 

Average  for  ) 
^    six  years.    ]" 

£ 

8 

£ 
111 

1850 

1851' 

1st  January 

6 

111 

1853 

1st  July 

H 

11* 

18.57 

a 

H 

16 

1858 

1st  January 

7i 

15 

1865 

7* 

111 

1866 

7 

I  to  8 

(( 

1867 

7 

m 

1868 

6^ 

a 

1869 

t( 

10 

1870 

7i 

(( 

1871 

7 

u 

1872 

81     • 

lOi 

1873 

m 

17* 

1874 
1875 

12i 

9i 

20* 

173 

' 

-!■' 4 

a 

31st  December 

7i 

16* 

LEAD. 

DATES. 

Englisli  Pig. 

Per  ton. 

1S45)  Average  for) 
1850)     six  years.   ^ 

£ 

17* 

2 

1851     1st  January 

it 

1853     1st  July 

24i 

1857 

25 

1858     1st  January 

23 

1865 

20 

1866 

21* 

1867 

20 

1868 

19* 

1869 

19 

1870 

« 

1871 

18 

1872 

19 

1873 

211 

1874 

241 

1875 

24 

"    31st  December 

22j 

^^^^^ 

PROGRESSION  OF  FACTS. 


21 


TIN. 

DATES. 

British  Bars,  in  Barrels. 

Per  ton. 

1S45)  Average  for) 
1850  i    si^y^^'-s-    1 

& 
85i 

If 

1851     1st  January 

84 

1853     1st  July 

108 

1857 

143 

1858     1st  January 

109 

1865 

99 

1866 

104 

1867 

85 

1868 

96 

1869 

111 

1870 

118 

1871 

135 

1872 

153 

1873 

146 

1874 

122 

1875 

101 

"     31st  December 

85 

SUG 

AR. 

DATES. 

British  Plantation, 

Bengal  Good. 

Brown 

. 

Yellow  and  White. 

Per  cwt. 

Per  cwt. 

18451 
to     1 

Average  for  "> 

s. 
28 

d. 

0 

li 

s. 
30 

d. 
0 

s. 
36 

d. 
0 

a 

s.    d. 
49     0 

1850 ) 

'    six  years.     \ 

1851 

1st  January 

26 

0 

u 

28 

0 

34 

0 

46    0 

1853 

1st  July 

20 

0 

li 

23 

0 

27 

0 

31     0 

1857 

u 

40 

0 

(( 

44 

0 

45 

0 

48    0 

1868 

1st  January 

23 

0 

n 

26 

0 

33 

01 

36    0^ 

1865 

a 

18 

6 

li 

21 

6 

24 

0 

30    0 

1866 

22 

6 

«( 

24 

6 

27 

0 

a 

1867 

19 

6 

Li 

22 

0 

24 

6 

28    0 

Grey 

Yellow. 

Low  to  Fine  White. 

1868 

23 

6 

(( 

26 

0 

25 

6 

31     0 

1869 

23 

0 

u 

27 

0 

24 

0 

29    0 

1870 

27 

0 

u 

32 

0 

27 

0 

32    0 

1871 

26 

0 

(( 

a 

28 

0 

a 

1872 

29 

0 

(( 

« 

27 

0 

31     0 

1873 

26 

0 

(i 

30 

0 

23 

0 

27    0 

1874 

23 

0 

ii 

27 

0 

21 

0 

26    0 

1875 

24 

0 

ii 

27 

0 

21 

6 

24     6 

"  31st  December 

21 

6 

li 

24 

0. 

19 

0 

22    0 

22  LONDOK  BANKING   LIFE. 


CHAPTER    IV. 

THE  COLLAPSE  OF  COLLIE. 

"  1  know  of  nothing  for  which  these  violent  alternations  of  'pros}jerity,' 
and  'disti-ess,'  of  speculation  and  panic,  are  more  to  he  regretted  than 
for  their  effect  in  nurturing  the  spirit  of  the  gambler.  The  old- 
fashioned,  steady,  plodding,  prudent  and  honest  merchant  or  manu- 
facturer has  become  a  rare  exception  from  the  general  ride.  Speaking 
generally,  our  men  of  biisiness  of  all  ranks  and  kinds  are  in  com- 
parison with  their  predecessors  of  the  last  century,  unsteady,  in  haste 
to  he  rich,  fearless  of  risk,  sharp  or  ready  to  take  advantage  of  all 
opportunities  rather  than  signally  honest  and  true." 

Edwakd  Gibbon  Wakefield, 

Notwithstanding  the  commercial  failures  of  April 
and  May,  there  was  little  else  than  a  ripj^le,  certainly 
not  a  wave  of  disturbance  in  monetary  circles  until 
Messrs.  Alexander  Collie  and  Co.  suspended  payment. 
The  rate  of  interest  was  at  three  per  cent.;  more  than 
ordinary  ease  prevailed  among  the  banks ;  bills  for  dis- 
count were  scarce,  and  business  generally  was  being 
cultivated  as  though  no  great  dangers  were  impending. 
On  the  morning  of  the  15th  of  June,  Alexander 
Collie  had  declared  the  intention  of  his  firm  to  stop  ; 
they  cared  no  longer  to  continue  operations  in  doubt 
and  uncertainty,  although  admitting  it  was  a  volun- 
tary suspension,  and  that  they  could,  if  they  thought 
fit,  carry  on  for  two  or  three  years  longer  !  Such  a 
statement  was  significant  of  the  completely  elabo- 
rated circle  for  the  manufacture,  the  renewal,   and 


THE  COLLAPSE  OF   COLLLE.  23 

the  discount  of  their  paper.  The  admission  was,  more- 
over, characteristic  of  reliance  on  the  satellites  by 
whom  the  firm  was  surrounded,  and  of  a  belief  that 
the  pending  losses  could  be  held  in  terrorem  over  the 
banks  deluded  by  promises,  and  victimized  by  worth- 
less accomodation  paper. 

The  firm  and  its  supporters  had,  in  fact,  long  relied 
on  the  huge  system  of  credit  which  increased  from 
year  to  year,  and  revolved  about  transactions  of  as 
profitless  a  character  as  ever   the   race   of  so-called 
"  merchants  "  indulged  in  for  mere  adventure.  Early 
in  their  career,  Messrs.  A.  Collie  and  Co.  were  noto- 
rious from  being  engaged  in  the  blockade  running 
with  the  Southern   Confederate  States  of  America. 
Their  offices  were  then  crowded  by  reckless,  daring, 
and  unprincipled  spirits,  who,  having  nothing  to  lose, 
were  ready  instruments  for  any  enterprise.     Among 
them  there  was  an  enforced  obedience  ;  "  to  one  he 
was  told  to  go  and  he  goeth,  and  to  another  come, 
and  he  cometh !  "      Money  was  thus  sometimes  made 
in  a  facile  manner ;    each  success  led  to  increased 
risks  ;  and  although  the  "  profit  and  loss  account  " 
has  not  been  produced,  it  can  be  little  doubted  that 
the  seeds  of  decay  were  then  sown,  and  the  wretched 
structure  of  base,  worthless  credit  was   then   com- 
menced. 

Although  no  critical  examination  has  been  made 
into  the  system  of  trading,  perhaps,  never  will  be,  it 
is  certain  the  firm  endeavored  to  "  compass  sea  and 
land,"  skilfully  marshalling  their  myrmidons  through- 
out the  United  Kingdom.  Almost  every  Indian  port ; 
China  and  Japan  were  included  in  their  operations  ; 


24  LONDON  BANKCNG   LIFE. 

while  their  sympathies  with  the  United  States  of 
America  never  ceased.  When  the  failure  was  known 
in  City  circles  it  was  soon  understood  that  a  crisis 
had  in  reality  commenced,  and  it  was  even  boldly  as- 
serted by  the  principal  member  of  the  firm  that  the 
City  would  be  shaken  to  the  centre ;  that  the  Over- 
end  Gurney  and  Co.'s  collapse  would  be  exceeded  in 
magnitude,  and  that  trade  would  be  long  in  recover- 
ing the  effects. 

Such  predictions  were  before  many  days  realized 
for  as  the  bills  under  discount  matured,  the  firms 
trading  with  Messrs.  Alexander  Collie  and  Co.  de- 
clared their  inability  to  meet  engagements.  Not  less 
than  200  houses,  previously  deemed  unquestionable^ 
were  at  once  placed  under  suspicion.  Twenty  have 
since  failed,  some  have  avoided  suspension,  others 
have  struggled  with  difficulties,  or  are  known  to  be 
in  process  of  liquidation. 

When  the  balance  sheet  of  Messrs.  A.  Collie  and 
Co.  was  produced,*  it  excited  even  greater  astonish- 
ment than  the  first  intimation  of  their  insuperable 
difficulties.    It  revealed  the  startling  facts : — 

That  there  were  total  commitments  for  not  less 
than  3,000,000L;  the  unsecured  liabilities  on  bills 
discounted  were  2,260,000Z. 

That  the  available  assets  had  been  reduced  to 
1,148Z.  "  cash  at  bankers,"  and  7,500^.  bills  re- 
ceivable on  hand. 

That  the  estate,  taken  as  a  whole,  showed  only 
250,542Z.  estimated  available  assets,  against 
1,899,785Z.  estimated  liabilities. 

*  Vide  Appendix  I. 


THE  COLLAPSE  OF   COLLIE.  25 

That  some  shadowy  assets,  "  requiring  time  for 
realization,"  were,  in  an  imaginary  sense,  valued 
at  551,850L,  of  which  little  or  nothing  tangible 
could  be  ascertained,  although  assumed  to  be 
connected  with  the  blockade  running. 

That  a  great  absorption  of  capital  must  have  long 
gone  forward  in  the  "  Separate  Estates," —  the 
surplus  alone  being  estimated  at  75,000Z.  after 
the  "  rack  and  ruin  "  of  forced  sales,  and  the 
utter  destruction  which  always  follows  abandon- 
ment of  those  "  lares  and  penates  "  of  every  pri- 
vate household,  to  say  nothing  of  the  subsequent 
flight  of  the  nominal  owners. 

Such  were  the  revelations  of  their  balance  sheet 
and  it  became  apparent,  after  the  failure,  that  there 
were  worse  features  than  misadventure  or  uncontrol- 
lable losses.  Yet,  beyond  legal  circles,  there  was 
nothing  of  public  importance  known  until  the  2l8t  of 
July.  Then  it  was  that  the  chairman  of  the  London 
•and  Westminster  Bank  made  the  significant  state- 
ment to  the  proprietors  at  their  half-yearly  meeting : 
— "  In  addition  to  what  may  be  termed  the  ordinary 
difficulties  of  banking  business,  we  have  had  to  en- 
counter others  of  a  far  graver  character.  The  vicious 
course  of  trading  has  led  to  frauds  of  a  nature,  so  far 
as  the  experience  of  this  bank  is  concerned,  hitherto 
unknown  to  commerce.  In  dealing  with  the  grave 
matter  the  directors  deem  it  their  duty  firmly  to  ex- 
pose those  fraudulent  practices,  and  bring  home  to 
those  who  have  resorted  to  them,  the  dangers  of  their 
conspiracies.    This  is   strong  and  unusual  language ; 


26  LONDON  BANKING  LIFE. 

but  not  one  whit  stronger  than  the  circumstances 
warrant.  I  may  announce  that  Alexander  Collie 
was  arrested  last  night,  and  is  probably  at  the  Man- 
sion House  at_  this  moment.  In  discharging  these 
most  painful  duties,  the  Ijoard  will  receive  the  cordial 
co-operation  of  all  concerned  in  promoting  sound  and 
honest  dealing.  In  dealing  with  the  losses,  the  direc- 
tors have  pursued  the  same  course  as  they  have 
before  done  with  regard  to  bad  and  doubtful  debts ; 
by  at  once  making  provision  in  the  full  and  ample 
manner  set  forth  in  the  accounts  now  in  your 
hands."  * 

The  painful  narrative  as  regards  the  case  would 
not  be  complete  without  stating  that  various  rumors 
have,  from  time  to  time,  been  circulated  that  Alexan- 
der Collie  has  been  seen  at  Stockholm,  then  at  other 
places,  and  lastly  at  Barcelona.  The  fact  is,  however, 
that  little  reliance  can  be  placed  on  these  rumors,  for 
it  has  been  officially  announced  that  "  Alexander 
Collie  had  fled  from  the  charge  of  fraudulent  conspir- 
acy, and  by  his  own  act  he  confirmed  the  propriety 
and  justice  of  the  bank's  procedure.  The  escape  of 
Collie  was  that  of  no  ordinary  offender.  Within  a 
few  minutes  after  his  flight  became  known  to  the  di- 
rectors, a  reward  of  1,000Z.  was  offered  for  his  arrest. 
Telegrams  conveying  the  fact,  and  a  description  of 
his  personal  appearance  were  sent  to  all  chief  Conti- 
nental cities,  and  to  every  seajDort  in  the  United 
Kingdom  ;  skilled  detectives  were  placed  in  charge 
of  the  case,  and  no  practicable  step  for  securing  his 

*  The  chairman  of  the  London  and  Westminster  Banlc  at  the  annual  meet- 
ing on  the  21st  of  July,  1875. 


THE  COLLAPSE  OF   COLLLE.  27 

arrest  had  been  neglected.  It  would  be  impossible 
even  if  it  were  proper  to  dwell  at  anj  length  on  the 
mass  of  varied  information  tendered  to  the  bank, 
which  these  steps  elicited;  Every  suppos'ed  clue  to 
Collie's  whereabouts  had  been  thoroughly  tested,  and 
any  rumors  to  the  contrary  might  be  regarded  as 
absolutely  unfounded."* 

It  is  most  important  to  follow  the  preliminary  in- 
quiries to  establish  the  criminal  charge  of  obtaining 
money  under  false  pretences  made  against  the  firm. 
The  proceedings  at  the  Mansion  House  on  the  21st 
and  29th  of  July,  9th  of  August,  7th  of  September, 
and  18th  of  October  may  thus  be  summarized : — 

The  prosecution  alleged  that  the  firm  conspired  to 
draw  bills,  which  were  nothing  but  accommda- 
tion  bills ;  they  represented  that  the  bills  were 
trade-bills  given  for  goods  sold,  bearing  on  the 
face  of  them  certain  marks  and  numbers,  pur- 
porting to  refer  to  goods,  or  to  accounts  in  the 
ledger.  Some  of  the  bills  described  money  due, 
with  the  words  "  value  received ; "  and  other 
bills,  issued  and  negotiated,  had  no  reference 
whatever  to  goods ;  but  they  had  marks  which 
purported  to  refer  to  accounts  of  goods  de- 
livered. 

That  the  banks  in  taking  all  these  bills  and  dis- 
counting them  believing  that  they  were  given 
for  goods  supplied  ;  that  the  marks  and  numbers 
referred  to  actual  merchandise  in  transitu,  and 
for  which  proceeds  would  be  received. 

*  The  chairman  of  the  London  and  Westminster  Bank  at  the  half-yearly 
meeting  on  the  19th  of  January,  1876. 


28  LONDON   BANKING  LIFE. 

On  examination  of  the  firm's  books,  it  was  found 
that   those   bills   were   not  genuine    trade-bills 
drawn  for  goods  sold,  but  accommodation  bills, 
and  that  there  were  no  such  goods  sold,  and  no 
such  accounts  in  the  ledger  as  those  indicated 
by  the  marks  on  the  face  of  the  bills,  and  also 
that  the  persons  accepting  the  bills  had  no  goods 
account  with  the  defendants. 
There  was  evidence  given  that  the  firm  in  some 
instances  took  small  shares  in  ventures  to  com- 
plete  "  a  more  satisfactory  lien  on  the  goods  ;  " 
that  the  bill-brokers   discounted   on   the   belief 
that  there  was  either  produce  or  manufactures 
to  represent  each  transaction ;  and  that  their  ag- 
gregate business  was  spread  over  so  large  a  num- 
ber of  firms  as  to  reduce  each  separate  risk  to  a 
very  small  figure. 
Of  course  these  are   for   the   most   part   ex  'parte 
statements,  and  it  is  right  to  assume  that  answers 
could  be  given  or  extenuating  circumstances  urged, 
were  it  possible  to  proceed  with  due  regard  to  both 
sides  having  an  impartial  and  dispassionate  hearing. 


LOSSES  BY  BANKS.  29 


CHAPTER  V. 

LOSSES  BY  BANKS. 

"  Wealth  and  the  high  estate  of  pride, 
With  what  untimely  speed  they  glide, 
How  soon  depart ! 

"  These  gifts  in  Fortune's  hands  are  found ; 
Her  swift  revolving  wheel  turns  round, 

And  they  are  gone  ! 

*'  No  rest  the  inconstant  goddess  knows, 
But  changing  and  without  repose, 
Still  hurries  on!" 

COPLAS  De  Manbique. 

There  was  an  almost  spontaneous  movement  among 
the  Metropolitan  Banks  to  declare  their  losses,  for 
the  accommodation  bills  had  been  widely  spread,  and 
great  disasters  had  to  be  boldly  grappled  with  before 
the  shareholders.  The  public  either  instinctively 
anticipated,  or  followed  the  declarations  that  soon 
had  to  be  made  at  the  half-yearly  meetings.  There 
was  throughout  these  proceedings  a  determination 
neither  to  conceal,  lessen,  nor  tamper  with  the  diffi- 
culties. Tlie  reports  to  the  30th  of  June,  of  the  banks 
involved,  show  the  extent  of  the  transactions. 


30 


LONDON  BANKING  LIFE. 


BANK. 


London  andWestminster 

Union 

London  Joint  Stock .... 
London  and  County .... 

City 

Alliance 

Imperial 

Consolidated 

Total £ 


Declared 

Losses. 


£ 
500,000 

100,000 
52,000 

157,762 
41,000 
38,848 
nil. 
nil. 


889,610 


Taken  from 

Profits. 


£ 

152,000 
61,124 
52,000 
82,762 

6,000 
28,848 

nil. 

nil. 


Taken  from 
Reserve. 


£ 
348,000 

38,876 

nil. 

75,000 

35,000 

10,000 

nil. 

nil. 


382,734      506,876 


In  addition  to  the  losses  of  Banks,  the  Discount 
Companies  suffered  lieavily,  but  the  same  prompt 
measures  were  taken  for  placing  their  affairs  correctly 
before  the  shareholders. 


NAME. 

Declared 

Losses. 

Taken  from 
Profits. 

Taken  from 
Reserve. 

National  Discount  Company. 
General  Credit  Company.. . . 
International 

£ 
138,000 

nil. 

33,751 

111,839 

8,000 

V 

48,000 
nil. 
nil. 
nil. 

8,000 

£ 
90,000 

nil. 

33,751 

111,839 

nil. 

Financial  Association 

Standard  Discount  Company 

The  market  value  of  shares  in  all  banks  and  dis- 
count companies  immediately  responded  to  these 
declarations,  and  it  may  be  worthy  of  record  to  show 
the  fluctuations  in  1875. 


LOSSES   BY  BANKS. 


31 


BANK. 


London  and  Westminster 

Union 

London  Joint  Stock   . . 
London  and  County . . . 

City. 

Alliance 

Imperial 

Consolidated 


Highest 

Lowest 

Price. 

Price. 

£ 

£ 

78 

57 

64 

SSi 

53 

44A 

65J 

58* 

15 

12 

14 

Hi 

19 

17 

7 

6i 

There  were  satisfactory  proofs,  however,  that  the 
harmonious  relationship  between  the  directors  and 
shareholders  of  the  respective  concerns  was  in  no  sense 
largely  disturbed.  Regrets,  annoyances,  bitter  dis- 
appointments, were,  of  course,  manifested.  There 
was  an  absence  of  clamor,  no  excitement  or  revenge- 
ful feelings ;  only  a  calm,  steady,  invincible  faith  that 
the  great  springs  of  credit  were  unimpaired;  that 
the  strength  of  the  monetary  institutions  of  the  me- 
tropolis would  be  soon  restored  by  prudence,  and 
reasonable  self-denial  in  regard  to  dividends.  This, 
too,  was  readily  adopted,  as  may  be  traced  by  the 
reductions  at  once  submitted  to  on  the  recommenda- 
tion of  the  directors : — 


BANK. 


London  and  Westminster 

Union 

London  Joint  Stock .  . . 
London  and  County.  . . 

City :... 

Alliance 

Imperial 

Consolidated 


Total  Dividend  Total    Dividend 
in  ISTi.  in  1875. 


Per  cent. 

21 
15 
21 
20 
10 
8 
16 
20 


Per  cent. 
12 
15 
17i 
16^ 
8 
7 
16 
20 


32  LONDON  BANKING  LIFE. 

There  is  no  evidence  that  the  banks  suffered  in 
any  general  sense  in  public  estimation,  and  if  comfort 
can  be  taken  from  the  fact  that  "  their  strength  was 
sufficient  for  their  burden," — it  is,  at  least,  significant 
that  the  wealthiest  had  to  bear  the  heaviest  loss; 
that  the  oldest  and  best  constituted  had  most  to  en- 
dure in  the  "  furnace  of  affliction,"  and  that  if  the 
common  lot  was  one  of  trial,  the  season  was  passed 
through  with  a  degree  of  fortitude  becoming  great 
institutions  dependent  on  honor,  good  faith,  and  the 
observance  of  high  principles. 


POLICY   OF   OPPONENTS.  33 


CHAPTER  VI. 

POLICY  OF  OPPONENTS. 

"  Had  any  one  loritt'n  and  divide/' d  erroneous  things,  misusint/  and  for- 
feiting the  esteem  had  of  his  reason  among  men,  after  conviction  this 
censure  were  adjudg'd  him,  that  he  should  never  henceforth  write  hut 
what  were  first  examined  by  an  appointed  officer." 

Milton's  Areopagitica. 

The  general  opinion  in  City  circles  was  that  the 
comments  of  the  press  on  the  extraordinary  losses  of 
banks,  and  the  criminal  proceedings  which  followed 
did  not  afford  support  to  the  principles  of  commer- 
cial integrity  and  prudence.  It  is  remembered  with 
gratitude,  that  the  Times  performed  great  services  in 
the  past  to  the  cause  of  commercial  rectitude  and 
honor ;  the  Barnes'  Scholarships  and  the  monument 
at  Lloyd's  being  memorials  not  easily  forgotten. 

Knowing  something  of  the  deliberation  which  has 
characterized  the  movements  of  the  banks,  the  asser- 
tion may  be  made,  without  hesitation,  that  there  was 
no  excitement,  vindictiveness,  or  sensational  proceed- 
ings. A  careful  discrimination  was  also  exercised  to 
distinguish  legitimate  losses,  the  result  of  falling 
markets  for  two  or  three  years,  from  those  disgraceful 
bill  transactions  which  have  shaken  mutual  confidence 
and  disturbed  the  relations  between  banker  and  mer- 
chant.     There  was  further  constant  and  judicious 

3 


34  LONDON   BANKING   LIFE. 

care  extended  to  those  who  make  inevitable  losses  : 
but  it  was  recognized  that  the  time  had  arrived  to 
mark  with  severe  reprehension  those  guilty  of  the 
malpractice  of  transferring  individual  losses  to  public 
institutions.  It  should  indeed  be  a  subject  of  con- 
gratulation that  vicious  trading  has  at  least  for  a  time 
been  rooted  out ;  to  which  there  should  be  further 
assistance  by  giving  moral  support  to  all  prudent 
measures  for  completely  clearing  the  commercial 
atmosphere. 

In  adverting  to  the  criminal  charges,  it  may  be  well 
to  observe  the  first  principles  involved : 

A  bill  may  be  an  "  accommodation  "  between  two 
friends,  but  the  words  "value  received"  do  not  de- 
stroy its  validity  to  the  innocent  holder.  Assuming 
that  no  money  has  passed,  and  only  a  commission 
given  for  the  "  use  of  the  name,"  there  are  ample 
means  of  preserving  the  liability  of  drawer  and 
acceptor.  But,  above  all,  supposing  each  bill  has 
been  drawn  '"  for  goods,"  or  against  foreign  or  colonial 
invoices,  and,  after  the  words  "value  received"  the 
mark  of  the  goods  and  the  name  of  the  ship  fully 
described  in  the  bill  of  exchange,  is  it  contended  that 
when  all  this  is  a  fiction,  the  charge  cannot  be  sus- 
tained of  "  fraudulent  pretences  ?  " 

There  was  no  ordinary  astonishment  m  the  City, 
at  the  legal  proceedings  to  settle  these  points;  but 
that  there  should  be  any  attempt,  by  a  constructive 
case,  to  lead  to  a  false  issue,  and  divert  men's  minds 
from  the  true  question  was  a  source  of  amazement, 
for  it  is  obvious  that  commercial  morality  must  be 
maintained,  and  that  credit,  the  mainspring  of  our 


POLICY   OF  OPPONENTS.  35 

great  and  extending  commerce,  has  to  be  purged  from 
all  that  is  notoriously  spurious  and  injurious  to  the 
national  honor. 

In  fact,  there  is  little  cause  of  complaint  that  the 
banks  have  not  acted  with  composure,  or  that  excite- 
ment has  been  contagious  from  directors  to  share- 
holders. There  has  been  no  cloaking  over  the  mis- 
fortunes. Each  institution  has  in  its  turn  laid  bare 
its  position,  and  courted  on  all  points  the  fullest 
investigation.  Surely,  when  800,000/.  has  been 
declared  and  admitted  as  loss,  the  appetite  for  mis- 
fortunes may  be  satisfied !  The  depreciation  in  share 
property  has  not  been  less  than  25,000,000/.  There 
is  a  rigid  scrutiny,  moreover,  into  about  30,000,000/. 
of  engagements,  the  result  of  which  must  be  highly 
beneficial.  It  is  only,  therefore,  an  act  of  justice  to 
support  the  Metropolitan  Banks,  which  have  shown 
a  praiseworthy  intention  to  meet  the  exigencies  of 
the  times  in  a  bold,  uncompromising  and  public 
spirited  manner. 

In  order  to  follow  those  who  have  rebuked  the 
monetary  institutions,  the  arguments  may  be  thus 
summarized : 

It  is  not  proved  that  those  who  are  charged  with 

issuing  "accommodation  bills"  have  made  any 

representations  to  deceive  others. 
There  has  been  a  singular  coincidence  between  the 

determination  to  prosecute  and  the  holding  of 

certain  bank  meetinsrs. 
The   indignation,    or  "  sympathetic  applause,"   is 

nothing  more  than  a  "late  awakening  to  the 

realities  of  the  situation." 


36  LONDON   BANKING   LIFE. 

The  "utter  sham  "  ought  to  have  been  known  long 
since,  as  the  ''  normal  position  for  years "  was 
easily  to  be  ascertained. 

There  are  moral  platitudes  and  obvious  deductions 
in  abundauce  throughout  the  recent  discussions,  but 
the  rebuke  or  warning  the  commercial  world  requires 
is  not  forthcoming,  still  less  has  there  been  the  least 
support  to  the  banking  interests  in  the  criticisms  on 
their  proceedings.  It  has  indeed  been  well  said  that 
"  for  years  past  the  Times  has  been  the  first  to  expose 
frauds  on  the  mercantile  commuuity,  and  that  it  has 
even  suffered  by  so  doing ;  but  Avhen  it  publishes  an 
article  expressing  all  sorts  of  hesitation  and  doubts 
as  to  the  guilt  of  joarties,  surprise  must  be  expressed." 

In  reply  to  the  hostile  criticisms  it  may  be  asked, — 
Is  it  not  ao-ainst  law  and  reason  to  find  two  sets  of 
bills  for  one  cargo  of  goods  ?  A  double  money  trans- 
action, where  only  one  was  necessary  or  justifiable? 
Then  observe  how  the  circle  of  each  bill  is  completed. 
There  are  drawer,  acceptor  and  bill-broker.  The 
latter  especially  is  supposed  to  be  the  "  detective  " — 
not  merely  a  go-between, — but  a  respectable  guaran- 
tor, and  each  of  these  must  be  either  privy  to  the 
transaction,  or  hoodwinked  and  blinded  before  the 
banker  can  be  deceived. 

The  arorument  is  somewhat  absurd  to  assume  that 
the  banks  have  wished  to  "  hush  up,"  or  conceal  any 
gigantic  conspiracy.  They  rely  on  honor,  punctuality, 
good  faith,  and  other  ethical  laws  for  their  self-pre- 
servation. There  is,  too,  the  principle  in  trade  that 
a  banker  should  be  dealt  with  as  a  physician — the 
whole    truth,    no    concealment — otherwise    neither 


POLICY   OF   OPPONENTS.  37 

medical  prescription  nor  financial  remedy.  Surely, 
the  Overend,  Gurney  and  Co.'s  affairs  were  not  con- 
cealed ?  Was  there  any  desire  to  cloak  over  the  Pul- 
liiiger,  the  Roupell,  or  the  Robson  cases?  No  !  For 
the  obvious  reason  that  great  offenses,  like  state 
secrets,  are  not  to  be  screened  with  impunity,  nor  is 
it  desirable  that  the  world  should  be  unconscious  of 
those  offenders  who  leave  such  "  foot-prints  on  the 
sands  of  time."  " 

The  press  was  severe  enough  about  the  "utter 
shams  "  of  commerce;  but  only  for  the  purpose  of 
showinsf  the  inevitable  io^norance  t>f  those  who  are  the 
victims  of  deep-laid  conspiracies,  the  effects  of  which 
can  neither  be  foreseen  nor  guarded  against.  That 
such  ignorance  exists  is  one  thing,  and  to  be  lament- 
ed ;  but  is  it,  therefore,  cultivated  as  a  supreme 
happiness?  Is  there  any  charm  in  sleeping  over  a 
burning  volcano  ?  Or  can  it  be  that  the  regions  of 
the  West  have  a  sublimation  of  wisdom,  while  in  the 
East,  citywards,  there  is  neither  light  nor  common 
bense?  The  tastes  and  habits  of  distant  luminaries 
may  differ.  It  may  be  that  sumptuous  banquets  and 
gorgeous  billiard-rooms  are  differently  regarded  ;  cer- 
tain it  is  that  costly  pictures  from  basements  to  stair- 
cases are  not  always  to  be  determined  as  real  wealth. 
It  is  feared  that  the  age  is  "growing  old"  in  luxury, 
that  merchants  are  becoming  Sybarites,  and  in  such 
cases  the  decay  of  empires  may  be  foretold  when  crime 
is  solaced  in  its  splendor,  Avhen  subtleties  and  mental 
reservations  are  allowed  to  take  the  place  of  the 
grand  old  principles  which  have  made  English  credit 
everywhere  respected  and  honored. 


>>i3iili2 


38  LONDON  BANKING  LIFE. 

It  is  necessary  to  keep  in  view  the  method  of  treat- 
ing the  mercantile  failures.  There  is  no  intention  to 
"  chop  logic  "  with  public  writers,  although  there  is 
a  strange  difference  between  them;  some  laboring 
after  originality  in  monetary  science,  like  saints  who 
"  hunger  and  thirst  after  righteousness,"  without  ever 
attaining  that  inheritance ;  others  indulging  in  sen- 
sationalism, taking  the  moral  line  of  condemnation, 
and  sagely  deducting  lessons  of  experience  as  well 
for  merchant  as  banker. 

The  change  was  quite  marvellous  after  the  dis- 
appearance of  Alexander  Collie.  At  first  he  was 
"more  sinned  against  than  sinning."  There  were 
even  excuses  for  iniquitous  systems  of  finance — and  it 
was  gravely  doubted  whether  the  law  had  been  vio- 
lated. The  "alleged  frauds,  if  they  were  really 
frauds,"  afterwards  became  "crimes  of  a  very  heinous 
character,"  and  the  "  disappearance  could  hardly  be 
interpreted  otherwise  than  as  a  practical  admission  " 
of  absolute  guilt,  aggravated  by  the  "  despicable 
meanness "  of  refusing  to  face  the  consequences  of 
the  prosecution.  This  was  the  sort  of  lesson  incul- 
cated by  those  who  believe  in  the  assertion  that 
"nothing  succeeds  like  success;"  but  the  ignoble 
doctrine  should  find  no  place  in  commercial  circles, 
where  sagacity  is  not  measured  by  rapaciousness,  nor 
wisdom  by  the  extent  of  audacity.  The  gross  licen- 
tiousness of  recent  trading  may  receive  justification 
from  those  who  supported  blockade-running,  and  have 
sympathies  only  with  the  glare  and  glitter  of  West- 
end  life ;  but  it  should  have  no  admirers  where  sound 
character,  prudence,  and  forethought,  are  regarded 


POLICY  OF  OPPONENTS.  39 

as  the  best  inheritance,  and  the  surest  means  of  attain- 
ing to  prosperity.  By  disregarding  all  such  "  old 
saws,"  the  apologetic  writers  had  only  a  mild  form  of 
rebuke  for  the  trader  who  incurred  obligations  he 
was  unable  to  discharge,  while  it  was  allowed  to 
be  an  open  question  whether  the  banks  which  have 
been  victimized  "had  not  themselves  to  thank"  for 
losses  unparalleled  in  extent,  and  which  excited 
astonishment  rather  than  condemnation. 

By  no  process  of  argument  is  it  intended  to  lessen 
the  extent  of  the  losses.  But  surely  the  banks  have 
the  right  to  compare  the  dividends  of  the  last  twenty 
years  with  the  misfortunes  of  the  half-year  ending 
June,  1875.  They  may  also  be  allowed  to  calculate 
the  percentage  of  loss  on  the  capital  turned  over  and 
intrusted  to  their  management.  With  these  two 
points  conceded,  there  is  not  much  to  groan  over. 
The  banks  "  made  a  clean  breast  of  it,"  and  may  still 
be  regarded  as  among  the  noblest  of  joint-stock  insti- 
tutions, the  most  successful  means  of  utilizing  spare 
capital,  encouraging  habits  of  thrift,  and  stimulating 
the  skin  and  enterprise  of  the  nation.  They  have 
the  responsibility  of  employing  eighty  millions  of 
money,  turned  over  at  least  three  times  annually  in 
loans  and  discounts,  while  how  often  it  revolves  in 
the  daily  clearings  and  across  the  counters  of  the 
banks  would  pazzle  the  most  eminent  statist  to  deter- 
mine. In  following  this  huge  business,  it  is  easy  to 
criticise — a  very  simple  process  to  analyze  blunders, 
— a  charming  recreation  to  take  pleasure  in  the 
misfortunes  of  others  !  But  is  it  not  the  duty  of  the 
public  writer  to  guide,  direct,  and  control  the  course 


40  LONDON   BANKING  LIFE. 

of  events  ?  Does  not  his  province  lie  as  much  in  cor- 
recting as  in  opposing — in  suggesting  remedies  rather 
than  finding  fault?  Yet  there  has  been  a  strange 
tendency  "■  to  arouse  reflection;"  to  excite  those  who 
trustfully  commit  their  money  to  a  sense  of  suspicion ; 
and  to  doubt  if  the  "  one  vast  reservoir  "  should  be 
preserved  for  the  numerous  channels  which  represent 
the  savings,  the  uninvested  capital  of  London. 

It  is  true  the  banking:  establishments  have  been 
favored  with  some  practical  suggestions.  But  what 
do  they  amount  to  ?  That  the  reference-book  should 
be  more  carefully  consulted ;  the  bill-brokers  subject 
to  rigid  treatment ;  the  law  of  averages  studied  so 
as  to  divide  risk  and  lessen  current  contigencies  ! 
There  is,  however,  little  "  new  undet  the  sun,"  and 
if  Solomon,  in  all  his  glory,  asserted,  "  of  making 
books  there  is  no  end,"  he  might  also  declare  that 
wisdom  does  not  always  dwell  with  men  !  Think 
who  have  worn  the  mantle  of  City  editorships  !  Re- 
flect on  the  great  names,  now  no  more,  or  suffering 
an  inglorious  silence.  From  them  there  might  have 
been  the  noblest  of  lessons  ;  wisdom  worthy  of  states- 
men from  the  crisis.  Yet  there  has  been  little  else  de- 
duced than  the  strange  admission  that  after  a  rigid  ex- 
amination of  documents,  it  is  "  admirable  to  trace  the 
neat  manner  by  which  the  whole  game  is  cloaked  over." 
Such  has  been  the  onlj^  conclusion  drawn  from  a  gi- 
gantic swindle  ;  the  floating  of  a  huge  mass  of  worth- 
less accommodation  bills,  and  an  amount  of  capital 
lost,  as  irretrievably  as  though  it  had  been  sponged 
up, — the  amount  being  equal  to  a  large  proportion  of 
the  revenue  of  the  United  Kingdom. 


POLICY  OF   OPPONENTS.  41 

The  great  Metropolitan  Banks  have,  it  is  asserted, 
"  violated  one  of  the  soundest  principles  of  political 
economy,"  that  of  the  division  of  labor.  The  sys- 
tem under  which  they  work  has  "  been  tested  and 
found  wanting,"  and  there  is  a  vague  generalization 
about  banks  "■  small  and  great,"  with  an  attempt  to 
discriminate,  without  actually  naming  any  one  par- 
ticular institution.  The  object,  however,  is  plainly 
to  denounce  the  large  banks,  who  have  "  employed 
some  of  their  money  ill !  "  It  is  gravely  stated  that 
"•  the  mischief  has  been  growing  for  a  long  time 
past,"  and  what  is  now  witnessed  is  "  simply  its  cul- 
mination." What  has  "  culminated  "  has  been  rascal- 
ity, not  defective  management,  for  at  no  period  since 
the  establishment  of  joint-stock  banking  has  trade 
been  so  demoralized,  or  merchants  less  mindful  of 
their  own  honor. 


42  LONDON  BANKING  LIFE. 


CHAPTER    YII. 

CRITICAL  COMMENTS. 

"  In  real  life  you  rarely  have  to  organize  from  the  beginning,  but  rather 
to  take  up  organization  at  a  certain  point  of  its  progress.  Hence  the 
failure  of  constitution-mongers  like  the  Abbe  Sieyes,ichoare  sublimely 
indifferent  to  the  state  of  facts  around  them.  To  use  a  witty  expres- 
sion of  Charles  II.,  they  will  not  see  that  ^nothing  more  can  be  done 
in  the  matter  than  is  possible.' 

"Plans  are  often  organized  to  embrace  the  settled  and  the  past  which 
can  only  have  a  chance  of  succeeding  by  being  limited,  in  the  first  in- 
tance,  to  the  unformed  and  the  future." 

Arthur  Helps. 

Taking  the  statistics  of  the  last  twenty  years,  it  will 
be  found  that  there  has  been  no  spasmodic  course  of 
action  by  the  Metropolitan  Banks  ;  but,  throughout, 
a  steady  growth,  and  a  solid  prosperity,  for  the  ex- 
panding commerce  of  the  country  to  rest  upon,  which 
should  not  have  been  abused,  still  less  victimized,  by 
those  who  have  •  availed  themselves  of  its  powers. 
The  reserves  have  also  been  increasing,  investments 
larger  than  ever  made  in  Government  Securities,  and 
support  afforded  to  the  great  producing-countries 
which  have  given  England  an  ascendency  all  over  the 
world.  The  latest  figures  show  these  remarkable  re- 
sults : — 

30th  June.  31st  December. 

Deposits £77,577,000  £74,702,876 

Reserve  Fund 2,786,000  2,943,581 

Government  Stocks 9,982,000  11,146,635 

BiUs  Discounted,  and  Loans 99,352,000  97,073,217 


CRITICAL  COMMENTS.  43 

The  position  of  joint-stock  banking  in  Scotland 
can  be  ascertained  by  the  following  statistics  from 
the  latest  annual  accounts  : — 

Deposits £78,401,000 

ReserveFund 3,607,000 

Govemraeut  and  Indian  Securities,  Cash,  and  Short  Loans. ..  22,194,000 
Bills  Discounted,  and  Loans 74,602,000 

These  figures,  like  those  connected  with  the  Metro- 
politan Banks,  show  a  steady  increase  of  prosperity ; 
that  industry  and  thrift  are  largely  co-equal ;  and 
that  banks  have  a  well-defined  public  duty  in  admin- 
istering to  the  requirements,  not  of  borrowers  only, 
but  of  depositors. 

It  would  be  an  additional  benefit  to  ascertain  ex- 
actly the  condition  of  Irish  banks.  The  statistics 
are  not  yet  obtainable ;  but,  excluding  the  bank  of 
Ireland  and  three  provincial  banks,  the  following  fig- 
ures give  an  approximate  statement  of  their  condi- 
tion : — 

Deposits £17,426,021 

Reserve  Fund  941,000 

Government  and  Indian  Securities,  Cash,  and  Short  Loans. ..  5,387,485 

Bills  Discounted,  and  Loans 16,799,379 

With  this  experience,  is  there  any  reason  in  the 
denunciations  of  joint-stock  banking  ?  Is  it  expedi- 
ent to  educate  the  public  to  a  new  faith,  to  an  impor- 
tation of  French  ideas,  and  an  application  of  doctrin- 
aire sentiments  ?  Yet  the  following  proposals  have 
been  made  for  public  consideration : — 

That  there  is  to  be  "greater  responsiblity "  on 
banks  through  the  "  Soci^t^  en  Commandite  sys- 
tem."   That  capitalists  are  to  spread  their  money 


44  LONDON   BANKING   LIFE. 

among  all  deserving  classes  of  the  industrial 
community  !  That  there  are  to  be  "  active 
partners  or  ^/mnifs,"  instead  of  dormant  part- 
ners, or,  as  may  be  assumed,  non-acting  direc- 
tors. That  there  is  to  be  '"  less  business  done  by 
the  discount  bills  of  exchange  ;  "  consequently 
money  is  to  be  "  lent  for  fixed  periods,"  and 
there  is  to  be  "  irrigation  and  not  inundation  " 
deducing  from  the  Cobden  theory  that  the  thing 
required  is  that  capital  shall  be  "  within  the 
reach  of  the  artisan  for  his  various  experi- 
ments." 

Although  the  press,  as  a  rule,  did  not  editorially 
commit  itself  to  any  new  theories,  the  newspaper 
teemed  with  letters  on  this  "  growing  evil  I  "  A 
writer,  who  confessed  to  practical  experience  "  once 
upon  a  time,"  attacked  the  whole  principle  of  modern 
banking,  by  asserting  that  the  custom  of  "  allowing 
interest  on  deposits  produced,  and  will  continue  to 
produce,  results  which  have  recently  appeared.  It 
has  concentrated  vast  sums  of  money  into  few  hands 
partly  irresponsible,  and  has  destroyed  the  energy 
and  foresioht  of  the  private  capitalist,  who  has 
resigned  his  function  of  looking  after  his  own  invest- 
ment into  the  hands  of  the  holders  of  millions," 
Are  such  assertions  true  ?  Will  they  stand  investi- 
gation ?  Does  the  experience  of  the  past  twenty 
years  warrant  such '  conclusions  ?  Take  them  in 
order ; 

It  is  contended,  for  instance,  that  deposits  are 
evil.      Surely   not  to  the  thrifty,  who  leave  them 


CRITICAL  COMMENTS.  45 

with  banks  and  receive  adequate  interest,  nor  to  the 
shareholders  who,  by  utilizing  the  money  have  had 
enormous  dividends  !  But  if  an  evil  to  trade,  which 
has  been  "  demoralized,"  "  the  rogue  and  swindler, 
as  well  as  the  innocent,"  have  alike  been  corrupted, 
and  it  is  added  that  "  it  has  taken  forty  years  to  ar- 
rive at  the  present  perfection."  By  thus  reducing 
the  assertion  to  its  native  simplicity,  it  is  obvious 
that  the  writer  has  gone  too  far.  Heavy  crushing 
assertions  like  these  fail  to  carry  conviction,  else  the 
natural  deduction  would  be  that  all  trade  is  vicious, 
that  credit  Oannot  soundly  be  administered,  and  the 
commerce  of  the  World  would  cease  to  depend  on 
banking  capital !  Is  it  forgotten  that,  long  before 
England  tried  joint-stock  banking,  Scotland  had 
proved  the  legitimacy  of  trading  on  deposits  ?  Ire- 
land only  began  to  be  prosperous  when  the  same  system 
was  pursued  of  drawing  capital  into  commercial 
centres,  so  as  to  utilize  in  all  branches  of  trade. 
The  United  States  of  America  and  the  Colonies  also 
adopt  the  same  course  of  business,  without  which 
enterprise  would  cease,  and  confidence  no  longer  be 
cultivated  among  the  trading  classes. 

The  charge  as  to  the  irresponsibility  of  those  who 
employ  deposits  defeats  itself,  and  requires  little 
effort  to  expose  the  fallacy.  Are  the  Gilbarts,  the 
Pollards,  the  Scrimgeours,  the  Higleys — giants  in 
banking  circles — all  forgotten  ?  Have  they  left  be- 
hind them  disciples  still  living  in  almost  every  coun- 
try where  the  English  language  is  spoken,  and  Brit- 
ish energy  has  to  be  encouraged  ?  It  were  "  bootless  " 
to  remind  those  who  make  these  assertions  that  there 


46 


LONDON  BANKING  LIFE. 


is  daily  responsibility ;  that  directors  carry  forward  the 
organization  of  great  institutions ;  that  a  watchful 
public  spirit,  "  which  never  slumbers  nor  sleeps,"  is 
vigilant  in  detecting  errors,  and  exposing  the  least 
deviation  from  those  principles  which  elevate  and 
ennoble  the  banking  interest.  The  old  "  banking 
system  "  so  much  vaunted  at  times,  had  about  it  less 
of  the  "  fierce  light  that  beats "  on  the  joint-stock 
banks,  with  their  recurring  meetings  and  systematic 
balance-sheets. 

There  is  a  strange  inconsistency  in  the  statement 
that  energy  and  forethought  are  destroyed.  Is  it 
really  urged  that  the  depositors  are  "  idle,"  possessed 
of  no  discrimination  in  the  employment  of  capital 
and  unable  to  attend  to  their  own  affairs?  The 
public  have  lately  been  enlightened  as  to  the  classi- 
fication of  deposits  with  the  Scotch  Banks,  which 
showed  the  following  remarkable  results  during 
1874-5 :— 


Sums  not  exceeding 


£100.    .    .    . 

100  to     £500 

500  to     1,000 

1,000  to     5,000 

5,000  to  10,000 

10,000  to  15,000 

15,000  to  20,000 

20.000.     .    .     . 


£11,768,317 

24,121,745 

12,069,187 

17,775,389 

4,674,044 

1,593,075 

917,108 

3,324,408 

£76,243,273 

Here  is  ample  proof  that  the  steady  depositors  are  of 
the  sober,  industrious  classes,  the  "  bone  and  sinew  " 
of  the  country,  who  ought  not  to  be  scared  away, 
but  encouraged  by  the  great  banking  institutions. 
The  same  results,  it  is  believed,  could  be  relatively 


CRITICAL  COMMENTS.  47 

shown  by  the  English  and  Irish  Banks,  if  statistics 
were  obtainable  for  the  purpose,  and  it  is  hoped,  ere 
long,  a  classification  of  deposits  will  be  made,  for, 
apart  from  the  general  interests,  the  figures  would 
be  highly  serviceable  in  the  administration  of  banking 
affairs. 

In  almost  all  arguments  against  the  recent  bank 
losses,  there  is  a  conviction  that  traders  have  been 
too  long  allowed  a  wide  latitude  in  their  operations, 
carrying  forward  their  engagements  by  a  renewal  of 
bills,  and  temporizing  with  difficulties  until  they 
have  neither  the  courage  to  avow  nor  the  capital  to 
meet  their  losses.  It  is  a  facile  assertion  that  banks 
are  to  blame,  and  have  themselves  to  thank  for 
present  disasters.  Without  attempting  a  reply  to 
such  an  absurdity,  which  implies  that  those  who  toil 
to  make  money  have  lost  the  faculty  of  keeping  it,  it 
may  be  urged  that  banks  rely  on  honor,  believe  in 
character,  and  ha,ve  not  always  the  means  of  detect- 
ing fraud,  that  their  business  is  not  to  consider  all 
men  rogues,  until  honesty  is  regarded  as  an  exception 
rather  than  the  general  inheritance. 

There  is  a  race  of  writers,  following  the  movements 
of  the  money  market,  to  be  likened  to  the  "  provincial 
Chancellors  of  the  Exchequer  "  who  tormented  Sir 
Robert  Peel ;  gratuitous  instructors  of  the  public— 
who  undertake  duties  without  responsibilities,  and 
are  ready  to  "  prescribe,"  not  according  to  the  re- 
quirements of  the  patient,  but  from  the  abundance  of 
their  nostrums,  and  a  belief  in  their  own  infallibility. 
Their  productions  mostly  appear  as  letter  contribu- 
tions, printed  with  editorial  remarks,  which  at  times 


48  LONDON  BANKING  LIFE. 

may  be  regarded  as  suggestive  "  feelers,"  rather  than 
dogmatic  treatises. 

It  was  amusing  to  follow  some  of  these  correspond- 
ents in  their  oracular  effusions,  especially  so  with 
a  writer  who  confessed  he  "  once  "  was  in  harness  as 
a  manager.  He  petulently  attacks  the  system  of  al- 
lowing interest  on  deposits  by  inquiring  why  he 
"  must  revert  to  his  proposition  that  the  vast  accu- 
mulation of  funds  (?  money)  in  a  few  institutions  is 
the  encouragement  of  fraud  ?  "  It  is,  however,  clear 
that  the  proposition  was  not  correctly  stated ;  and  as 
the  premises  were  false,  so  were  the  deductions.  He 
admits,  indeed,  that  the  deposits  have  been  "suc- 
cessfully used  up  to  the  present  time,"  from  which  it 
follows  that  for  nearly  forty  years  the  joint-stock 
banks  have  been  exercising  a  beneficial  influence ; 
yet  it  was  contended  that,  in  the  space  of  six  months, 
the  system  has  "  culminated,"  and  this  profound 
banker  of  earlier  times  had,  unfortunately,  "  to  repeat 
ad  nauseam^  that  no  bank  managers  or  board  of  di- 
rectors can  manipulate  twenty  or  thirty  millions  of 
money  with  safety  to  the  depositors."  It  is  always 
clear  that  wild  reckless  assertions  carry  their  own 
answer,  and  that  little  or  no  attempt  is  necessary  to 
refute  their  absurdity.  Those  who  study  this  sub- 
ject with  the  gravity  it  deserves,  know  that  Adam 
Smith  by  no  means  encourages  such  reasoning,  nor 
would  his  doctrines  fail  to  support  the  principles 
and  practice  generally  of  modern  banking.  He 
watched  its  operation  in  Scotland,  the  business  there 
being  in  his  time,  as  since,  "  almost  entirely  carried 
on  by  banking  companies."     He  goes  on  to  remark 


CRITICAL   COJVIMENTS.  49 

that,  "though  the  conduct  of  all  those  different 
companies  has  not  been  unexceptionable,  and  has, 
accordingly,  required  an  Act  of  Parliament  to  regu- 
late it,  the  country,  notwithstanding,  has  ever  de- 
rived great  benefit  from  their  trade."  He  then  cites 
the  fact  that  the  commerce  of  Scotland  more  than 
quadrupled  itself  after  the  first  creation  of  the  two 
joint-stock  banks,  and  that  it  Avas  believed  in  his 
time  that  the  trade  of  Glasgow  had  been  doubled  in 
fifteen  years  ;  and,  he  adds,  "  that,  whether  the  trade, 
either  of  Scotland  in  general,  or  of  the  city  of  Glasgow 
in  particular,  has  really  increased  in  so  great  a  pro- 
portion during  so  short  a  period,  I  do  not  pretend  to 
know.  If  either  of  them  has  increased  in  this  pro- 
portion, it  seems  to  be  an  effect  too  great  to  be  ac- 
counted for'  by  the  sole  operation  of  this  cause. 
That  the  trade  and  industry  of  Scotland,  however, 
have  increased  very  considerably  during  this  period, 
and  that  the  banks  have  contributed  a  good  deal  to 
this  increase,  cannot  be  doubted." 

The  same  conclusions  are  to  be  drawn  from  an  ex- 
amination of  the  trade  of  the  United  Kingdom  during 
the  last  twenty  years. 

Imports.  Exports. 

1854  ..  £152,389,053  ..  £115,821,092 

1860  ..  210,530,873  ..  164,520,351 

1865  ..  271,072,285  ..  218,831,576 

1870  .  303,257,493  ..  244,080,577 

1874  ..  370,082,701  .  297,650,464 

1875  ..  373,941,125  ..  223,494,570 

Is  all  this  trade  an  unmixed  evil — developed  by 

the  "  mischief  "  of  deposits  ?     Far  from  such  being 

the  case,  it  is  certain  that  joint-stock  banks  have  had 

4 


60  LONDON   BANKING  LIFE. 

a  preponderating  power  in  placing  British  commerce 
in  the  vanguard  of  civilization,  and  making  London 
the  depot  of  the  world's  products.  Indeed,  if  de- 
posits were  not  fostered,  if  good  credit  balances  were 
not  maintained  as  the  essence  of  sound  banking, 
there  would  be  more  rotten  foreign  loans,  more  bub- 
ble companies,  and  gambling  of  all  sorts  than  at 
present,  imposing  on  the  credulity  of  the  saving  or 
laboring  classes,  and  making  "  confusion  worse  con- 
founded." 

Besides  the  objectors  to  deposits  at  interest,  there 
is  another  class  of  objectors  to  joint-stock  banking. 
These  assume  that,  instead  of  interest  being  allowed, 
commission  should  be  charged  for  the  safe  retention 
of  money,  like  a  "  warehouse-keeper,  who  charges  for 
safe  custody  and  management."  The  absurdity 
scarcely  needs  exposure,  except  to  assert  that  if 
metallic  currency,  or  bank-notes,  or  other  money 
equivalents,  be  only  so  much  furniture,  the  "  Pan- 
technicon "  or  a  "  safe  deposit "  can  be  resorted  to 
rather  than  a  bank,  which  has  for  its  functions  the 
bringing  of  borrower  and  lender  together,  producing 
profits  from  discount  or  interest  which  constitute 
one  of  the  economics  of  modern  science,  without 
which  trade  would  languish,  and  enterprise  beyond 
the  "  narrow  coast  line  "  have  little  encouragement. 

These  crude  notions  bring  to  remembrance  a  dis- 
cussion between  two  friends,  both  of  whom  had  fol- 
lowed and  thoroughly  understood  the  practice  of 
joint-stock  banking  in  Australia.  The  one  may  be 
described  as  an  objector,  the  other  the  supporter.  In 
those  colonies  there  is  a  fierce  competition  for  capital, 


CRITICAL   COJNOIENTS.  61 

rates  for  deposits  are  on  the  increase,  and  banks  are 
running  a  race  with  each  other  to  attract  money 
from  the  frugal  or  industrial  classes.  The  uninvested 
money  is  now  largely  left  with  savings  banks  ,  it 
being  rarely  placed  in  Government  securities,  and  it 
often  remains  for  a  long  period  without  fixed  em- 
ployment. The  objector  maintained  that  the  banks 
were  all  wrong  in  combining  to  attract  this  money  ; 
that  each  had  not  the  same  power  of  employment; 
that  some  did  not  require  further  resources ;  and 
others  would  be  better  without  an  increase  of  de- 
posits. The  reply,  however,  was  that  banks  were 
not  like  machines,  to  be  supplied  with  lubricating 
power ;  that  they  are  at  all  times  active  agents,  the 
medium  between  producer  and  consumer,  and  that 
nowhere  better  than  in  young  communities  is  their 
true  use  understood,  or  their  functions  more  tho- 
roughly discharged.  The  objector  maintained  his 
point  by  urging  that  those  who  did  not  require  de- 
posits to  supplement  capital  had  no  right  to  take 
them ;  that  when  money  was  wanted  it  should  be 
publicly  advertised  for,  or  solicited ;  and  that,  in  a 
word,  all  combinations  or  systems  leading  to  "  gre- 
gariousness  "  should  be  avoided  as  radically  unsound 
and  often  vicious  in  application.  The  supporter  of 
the  banks  was,  for  a  time,  disconcerted ;  almost  over- 
whelmed by  denunciations  of  "  class  interests,"  of 
"  monopolies  "  unjust  to  the  public,  and  of  unfair- 
ness to  the  trading  communities.  The  calmness  of 
reflection  and  the  refreshing  coolness  of  an  early 
morning  came  to  his  relief.  In  trying  to  adapt  his 
friend's  theories  to  the  practical  duties  of  life,  the 


52  LONDON   BANKING  LIFE. 

following  questions  were  raised : — Would  it  be  judi- 
cious to  drive  to  another  establishment  steady  sup- 
porters and  regular  customers?  One  day  to  take 
money  at  interest,  another  day  to  refuse  it  ?  To  ad- 
mit a  good  demand  for  capital  sometimes,  no  demand 
at  another  ?  To  combine  occasionally  with  kindred 
banks  as  to  rates,  and  afterwards  to  break  through 
agreements?  To  allow  1  per  cent,  under  an  estab- 
lished minimum  as  a  general  rule,  and  when  money 
became  scarce,  to  tout,  scramble  and  bargain  for  it 
at  1  and  2  per  cent,  above  the  terms  current  with 
other  banks  ?  With  all  diffidence,  as  one  "  shaken 
like  a  reed,"  the  supporter  of  banks  submitted  these 
questions  for  consideration,  and  his  friend,  being 
thus  "  cornered,"  found  refuge  in  the  trite  remark 
that  "  something  ought  to  be  done  ;  "  "  that  the  ven- 
tilation of  the  subject  should  be  followed  by  reform;  '* 
he  and  all  others  leaving  it  there  without  further 
contribution  from  the  wisdom  of  experience,  or  the 
genius  of  invention. 


BANKS  ON   SELF-IMPROVEMENT.  68 


CHAPTER  VIII. 
BANKS  ON  SELF-IMPROVEMENT. 

^^  Remember  that  what  is  now  and  then  done  may  get  a  momentary 

reputation  or  applause ;  but  ivhat  is  done  every  day  will  be  the  basis 

of  character  and  ultimate  reputation." 

LoKD  Palmekston. 

After  the  great  bank  losses,  there  was  an  obvious 
desire  to  make  alterations  for  dealing  with  the  money 
left  on  deposit,  and  it  is  now  necessary  to  consider 
the  prominent  suggestion  offered  in  the  interest  of 
joint-stock  banking.  Although  much  discussed,  it 
has  not  been  very  clearly  set  forth.  It  may  be  briefly 
stated  thus  : — Agree  not  to  be  bound  to  uniformity 
of  rates ;  abolish  the  regular  system  of  1  per  cent, 
under  the  Bank  of  England  minimum ;  meet  from 
time  to  time,  as  changes  occur,  to  decide  the  rate  to 
be  allowed ;  believe  in  the  inviolability  of  all  rates 
agreed  to  by  the  "  associated  banks."  In  all  other 
points  allow  each  institution  to  assert  liberty  of 
action  and  to  struggle  for  ascendency.  It  will  be 
observed  that  no  definite  principle  was  eliminated 
from  such  suggestions.  It  Avas  not  announced  wheth- 
er the  deposit  rate  was  to  be  li  or  2  per  cent,  under 
the  lending  rate  ;  whether  the  "  margin  of  differ- 
ence "  was  to  be  large  in  times  of  ease,  and  small 
when  money  was  in  demand ;  what  would  be  the 
practical  effect  under  a   lower  discount-rate  than  2 


54  LONDON  BANKING  LIFE. 

per  cent.,  or  of  a  rate  higher  than  10  per  cent,  per 
annum  ?  The  proposition,  as  stated,  was  not  made 
to  apply  to  such  circumstances  as  occurred  in  1866, 
which  may  again  have  to  be  contended  with  under  a 
great  demand  for  bullion  for  the  resumption  of  specie 
payments  in  France  or  the  United  States  ;  or  when 
China  and  Japan,  with  their  millions  of  people,  come 
fully  under  the  influence  of  monetary  science,  the 
motive  power  of  commerce  and  civilization. 

It  was  asserted  that  there  was  "  no  magic "  in  the 
present  system  ;  that  the  "  hard  and  fast  line  "  of  1 
per  cent,  under  the  Bank  of  England  rate  was  not  an 
infallible  rule ;  and  there  should  be  no  attempts  made 
for  its  continuance.  It  was  also  argued  that  the  pres- 
ent system  had  ceased  to  afford  profitable  results, 
and  that  a  change  should  be  made  in  the  interests  of 
shareholders  rather  than  the  public.  It  would  not 
be  difficult,  however,  to  prove  that  there  is  an  at- 
tractive force  in  the  "  charming  simplicity  "  of  an 
easy,  well-understood  regulation  ;  that  if,  over  a  long 
course  of  years,  it  has  worked  well,  the  exceptional 
experience  of  six  months  affords  no  reason  for  a 
change  ;  and  that  it  is  unwise  to  agitate,  to  disturb, 
and  unsettle  the  subject.  The  searching  question  of 
Lord  Melbourne,  "Can't  you  leave  it  alone?"  is 
appropriate.  There  is  no  wisdom  in  "meddling" 
unless  imperatively  required  ;  "  muddling  "  is  certain 
to  follow  from  false  movements,  and  there  may  be  no 
retracing  the  effects  of  a  divergence  from  the  long- 
established,  well  recognized  practice  of  modern 
banking.  One  of  the  most  able  of  modern  econo- 
mists  properly  asserts  that  the  old  system  has  pro- 


BANKS   ON  SELF-IMPKOVEMENT.  55 

duced  certainty,  while  there  is  only  darkness  in  the 
vao-ue  propositions  for  the  future.  There  is  no  dis- 
guising the  fact  that  large  dividends  have  been  paid 
to  shareholders ;  that  the  vested  interests  of  banks 
represented  by  the  plenitude  of  reserves,  the  import- 
ant staff  of  officers— the  mere  buildings— are  a  great 
and  growing  power  in  the  state ;  that  the  system  has 
endured  the  strain  of  1848,  1858,  and  1866;  that 
from  each  crisis,  instead  of  there  being  any  dishonor, 
the  banks  have  emerged  from  the  strain  without 
tarnished  reputations,  generally  realizing  increased 
importance  from  the  good  sense  and  practical  wisdom 
of  those  intrusted  with  management.  It  may  be 
urged  that  the  "  time  of  trial "  has  not  been  passed 
through  ;  but  look  at  the  terrible  lessons  of  war,  of 
famine,  and  revolution  ;  think  of  the  gold  discover- 
ies ;  and  of  the  introduction  of  free  trade  ;  of  the 
outer  world  brought  as  close  neighbors  by  steam  nav- 
igation and  telegraphy.  It  will  then  be  allowed 
that  joint-stock  banking  has  had  to  combat  with  great 
and  momentous  changes,  which  make  this  age  one  of 
the  most  famous  in  the  world's  history. 

It  is  satisfactory  to  find  that  at  present  no  change 
of  importance  has  been  made  in  the  relations  between 
the  joint-stock  banks  and  the  public.  The  only  prac- 
tical alteration  attempted  is  to  arrest  the  increase  of 
deposits  repayable  at  call,  and  to  substitute  seven 
days'  previous  notice.  Even  this  has  only  been 
brought  before  the  public  by  the  London  and  West- 
minster Bank  since  the  21st  October,  1875,  but  it  has 
not  in  reality  been  brought  into  operation. 

Already  some  beneficial  results   have  been  pro- 


66  LONDON   BANKING  LIFE, 

duced,  and  the  experiment  may  be  made  a  regulation 
to  be  generally  adopted  by  the  other  metropolitan 
banks. 

It  has  been  asserted  that  "  these  tentative  or  over- 
cautious steps  were  all  that  it  had  been  deemed  pru- 
dent to  adopt.  But  the  hope  was  not  abandoned  of 
proceeding  further  in  the  same  direction,  if  the  steps 
already  taken  proved  inadequate  to  the  exigencies  of 
the  business."  *  The  public  cannot  fail  to  be  inter- 
ested in  all  practical  improvements,  although  the  con- 
servatism of  monetary  science,  especially  in  great 
institutions,  has  become  an  axiom  of  the  City  so 
deeply  rooted  in  most  minds  as  to  prevent  mere  ex- 
periments or  rash  adventures. 

The  time  has,  however,  arrived,  when  the  allow- 
ance of  interest  on  current  balances  might  be  advan- 
tageously abolished.  The  system  is  still  followed  by 
the  Union  Bank  of  London,  the  London  and  County 
Bank,  the  Central  Bank  of  London,  the  Alliance 
Bank,  and  the  Imperial  Bank.  There  are  no  statis- 
tics for  determining  the  advantages  or  otherwise, 
derived  from  the  money  thus  held  by  banks ;  but 
it  is  remembered  that  the  system  was  the  offspring  of 
early  competition ;  as  each  bank  started,  the  public 
had  to  be  attracted;  novel  features  were  "few  and 
far  between ; "  allurements  were  offered  more  in  the 
sense  of  "  baits '"  to  the  unwary  than  of  actual  bene- 
fits to  the  public ;  and  there  was  less  advantage  than 
now  in  loans,  discounts,  or  good  management.  While 
only  a  slight  dependence  can  be  placed  on  "  associa- 

*  By  the  chairman  of  the  London  and  Westminster  Bank  at  the  meeting 
of  shareholders  on  the  19th  of  January,  1876. 


BANKS    ON   SELF-HVIPROVEMENT.  57 

tion "  or  "  combination "  of  banks  in  arriving  at 
common  rules  of  action,  a  strong  opinion  is  enter- 
tained that  this  change  might  well  be  agitated ;  that 
the  banks  would  be  strengthened  by  uniformity,  and 
that  the  public  would  not,  in  any  appreciable  man- 
ner, suifer  from  the  alteration. 

A  recent  correspondence  between  bank  directors 
asserts  "  that  the  credit  of  a  bank  must  depend  on 
the  prudence  and  integrity  of  its  management,  and, 
if  these  are  wanting,  no  contrivances,  such  as  paid 
up  capital,    reserves,   notices  of  withdrawal  of   de- 
posits, or  balances  at  the  Bank  of  England,  can  main- 
tain it  in  prosperity."     On  these  principles  sugges- 
tions arising  out  of  the  recent  agitation  of  banking 
questions   may  be    submitted  for    consideration   by 
those  who  are  responsible   for  future  management. 
The  principles  do  not  fail  to  embrace  all  that  is  sound 
and  prudent  for  internal  arrangement,  yet  manage- 
ment, or  the  power  of  controlling  circumstances,  must 
be  the  dominant  feature,  without  which  there  can  be 
no    continuing   influence,  or    permanent  prosperity. 
It  is  a  trite  remark  that  money  cannot  purchase  the 
rare  gift  of  tact,  even  in  the  most  ordinary  affairs  of 
life;  how,  then,    can    it    be    obtained    in    banking? 
Although  not  always,  yet,  as  a  rule,  within  the  ordi- 
nary staff,  the  trained  skilled  officers  of  a  bank  should 
be  stimulated  to  exertion  in  the  higher  departments, 
and  be  convinced  that  the  grandest  prizes  of  the  pro- 
fession are  within  their  grasp.     The  Scotch  school, 
over  a  long  course  of  years,  has  had  a  race  of  eminent 
bankers,  and  in  the  north  of  Ireland  the  same  power 
is  manifested.     There  is,  indeed,  almost  an  inherit- 


58  LONDON  BANKING  LIFE. 

ance  of  prudence  and  forethought  that  has  qualified 
these  men  for  banking  in  the  most  difficult  parts  of 
the  world ;  it  being  proved  they  are  astute,  hard- 
thinking,  patient  workers ;  that  in  society  they  are 
capable  of  exercising  power,  influencing  thought,  and 
refining  the  circles  to  which  they  belong.  It  is  hope- 
less to  assume  that  this  type  of  man  can  be  found 
anywhere.  Neither  are  bankers  heaven-born,  nor  can 
officers  according  to  mere  seniority  acquire  and  mature 
the  much-needed  wisdom  by  practice  and  experience. 
But,  on  the  other  hand,  there  is  no  worse  evil  in 
joint-stock  banking  than  "  over-weighting "  first- 
class  officers  with  the  burden  of  detail ;  imposing 
common  routine  work  on  them  better  done  by  sub- 
ordinates. Give  time  for  study.  Allow  leisure  for 
organizing  and  reorganizing.  "  Divide  and  govern," 
is  not  only  a  maxim  of  state  policy,  but  should  be 
recognized  in  all  great  establishments.  As  there  is  a 
palpable  absurdity  in  taxing  the  willing  horse,  and  a 
barbarous  cruelty  to  burden  the  swift  racer  with  a 
pound  weight  more  than  he  is  able  to  bear  easily 
when  running,  so  the  same  principle  applies  to  the 
chief  officer  of  a  bank.  Men  have  Idlled  themselves 
by  monopolizing  all  details,  and  have  passed  away 
from  the  field  before  their  work  was  half  accom- 
plished. Toiling  daily  from  eight  to  six  is  not  the 
duty  of  a  thinker ;  opening  every  letter,  attending 
every  committee,  hearing  all  complaints,  redressing 
every  grievance,  are  not  necessary  details  for  a  super- 
intendent. Great  banks  require  departmental  heads  ; 
internal  organization ;  men  to  succeed  one  another ; 
two  officers,  equal  in  age  and  experience,  ready  to 


BANKS   ON   SELF-IMPEOVEMENT.  59 

relieve  each  other  in  emergencies.  As  men,  "  high- 
minded  men,"  have  made  nations  great,  so  they  are 
indispensably  necessary  for  monetary  affairs.  These 
rules  have  in  some  cases  been  recognized,  and  no  dif- 
ficulty is  found  in  Government  offices,  none  is  known 
to  exist  in  the  Bank  of  England,  and  it  is  no  rash 
assertion  that  our  northern  bankers  have  more  ad- 
vanced views  on  these  subjects  than  the  metropolitan 
institutions.  In  a- word,  then,  the  period  has  come 
to  elevate  the  class  ;  improvement  will  be  manifested 
when  time  is  given  for  reflection,  when  the  social 
status  is  increased,  and  when  measures  of  reorgani- 
zation generally  admitted  to  be  necessary  are 
adopted. 

[The  correspondence  referred  to  "  between  Bank  Directors,"  if  not  a 
breach  of  confidence  or  trust,  is  a  signal  proof  of  at  least  a  violation  of  that 
"  declaration  of  secrecy  "  which  should  be  religiously  observed  in  aU  Banks. 
After  the  eminent  services  of  Mr.  J.  P.  Gassiott  to  the  London  and  West- 
minster Bank,  it  is  truly  unfortunate  that  he  has  not  been  better  advised 
than  to  "  rush  into  print "  in  his  season  of  honored  retirement  from  active 
life.] 


60  LONDON   BANKING  LIFE. 


CHAPTER  IX. 

SUGGESTIONS  FOR  THE  FUTURE. 

"  Uver  reaping  something  new ; 
That  which  they  have  done  but  earnest  of  the  things  that  then  shall  do." 

Tennyson. 

FoKEMOST  in  the  plans  of  improvement  should  be  an 
arrangement  within  the  banks  for  the  true  division 
of  assets.  The  principle  has  not  been  sufficiently 
discussed,  and  no  settlement  even  attempted.  Given 
.£30,000,000  of  deposits,  then  determine  whether  a 
fourth  or  fifth  should  not  be  in  Government  securi- 
ties ;  after  which  the  balance  might  be  proportion- 
ately divided  into  bills  having  three  months  to  run, 
and  short  loans  to  first-class  reliable  customers.  Fix 
moderate  limits  for  known  or  ascertainable  risks,  and 
enlarge  the  "  lines ''  where  balance-sheets  and  full 
publicity  are  obtainable.  There  will  be  no  great  dif- 
ficulty in  determining  these  points,  if  the  duty  is 
undertaken  in  a  large  and  liberal  spirit  of  fairness  to 
customers  of  tried  integrity.  The  bank,  with  its 
aggregate  duties,  its  corporate  responsibilities,  being 
above  and  beyond  all  individual  claims,  must  have  its 
powers  and  privileges  always  in  the  ascendant.  There 
has  hitherto  been  little  or  no  accurate  knowledge 
cultivated  within  the  banks  of  trades,  of  manufac- 
tures, of  distant  markets,  or  of  foreign  exchanges  ;  but 


SUGGESTIONS  FOR  THE  FUTURE.       61 

all  such  points  should  be  studied  by  those  who  ad- 
minister credit,  and  assist  in  regulating  the  great 
commerce  of  the  Emjjire.  A  perfectly  accurate 
knowledge  is  not  necessary  for  any  department  of  a 
Metropolitan  Bank ;  but  the  means  should  exist  for 
obtaining  it,  as  well  to  prevent  unjust  suspicions  as 
to  follow  the  movements  that  have  a  common  focus  in 
London.  It  is  well-known  these  movements  alter- 
nately radiate  outwards  and  inwards,  mostly  accord- 
ing to  seasons;  at  times,  there  are  disturbing 
influences,  glutted  markets,  novel  exchange  transac- 
tions, and  Government  finances.  How  are  all  these 
to  be  followed,  provided  for,  or  even  anticipated? 
It  is  obvious  that  for  such  purposes  there  should  be 
men  of  study,  of  large  grasp  of  mind,  great  force  of 
character ;  while  to  train  and  develope  such  men  is 
now  the  highest  and  most  incumbent  duty  of  those 
in  whose  hands  is  deposited  the  safety  and  progress 
of  joint-stock  banks  in  the  metropolis. 

It  would  be  a  great  advantage  for  the  joint-stock 
banks  in  London  to  analyze  their  deposits ;  not 
simply  to  classify  the  amounts,  after  the  manner  of 
the  Scotch  banks,  but  to  separate  the  "  short  money  " 
from  deposits  left  almost  in  permanence.  A  large 
amount  is  deposited  almost  as  fixed  investments,  and 
only  when  death  occurs  is  a  change  made.  In  such 
cases  the  depositor  avoids  all  risk  in  the  fluctuating 
price  of  securities ;  the  bank  having  to  pay  the  exact 
principal  when  claimed,  and  of  course  the  interest 
periodically.  What  then  is  the  proportion  of  such 
deposits  ?  It  would  not  be  carrjdng  the  analysis  too 
far  if  there  could  also  be  a  sub-division  of  money  be- 


62  LONDON   BANEING  LIFE. 

ginning  with  seven  to  ten  years ;  then  three  to  five 
years,  and  finally  one  year's  duration.  All  the  rest 
must  be  assumed  to  be  deposited  at  call,  or  short 
notice,  and  be  constantly  represented  in  cash,  bills, 
or  the  most  convertible  securities.  It  may  be  con- 
tended that  such  an  arrangement  is,  after  all,  very 
arbitrary,  unreliable,  and  that  the  first  "  crisis " 
would  show  the  whole  fabric  to  be  a  myth,  a  shadow, 
to  crumble  into  decay,  or  wither  as  the  "  gourd  "  of 
the  prophet's  admiration : — 

"  Like  the  baseless  fabric  of  a  visioii, 
The  cloud-capp'd  towers,  the  gorgeous  palaces, 
The  solemn  temples,  the  great  globe  itself." 

The  fact  is,  however,  that  all  crises  are  periods  of 
unreasoning  fear ;  prevision  is  almost  an  impossi- 
bility for  a  weak  and  uncertain  mental  condition ; 
nothing  can  prevent  a  panic  if  such  is  fiercely  entered 
upon  ;  but  as  Lord  Overstone  remarked  on  invasion, 
"  it  must  7wt  be,''  in  fact  it  is  impossible  in  England.* 
In  sound  banking  there  is  a  necessity  to  be  fore- 
armed, and,  therefore,  the  deposit  system  may  be 
strengthened  by  spreading  the  "  investment  money  " 
over  a  larger  basis  than  at  present  occupied.  Such 
a  course  would  avoid  the  spasmodic  movement  of 
large  masses  of  capital ;  there  would  be  less  reliance 
on  bills  of  exchange,  and  the  basis  would  be  Govern- 
ment securities  in  case  of  emergency.     The  whole 

*  The  probable  derivation  of  the  word  "  panic  "  is  well  known.  Pan,  one  of 
the  captains  of  Bacchus,  with  a  few  men,  put  a  numerous  army  to  rout  by  a 
noise  which  his  soldiers  raised  in  a  rocky  valley  abounding  with  echoes. 
This  stratagem  made  their  number  appear  far  greater  than  it  really  was,  so 
that  the  enemy  quitted  a  commodious  encampment  and  fled.  Hence  all  ill- 
grounded  fears  have  been  called  "panics"  or  panic  fears. —  Vide  an  admirable 
article  in  the"  British  Almanac  "  for  1867. 


SUGGESTIONS  FOE   THE  FUTURE.  63 

policy  of  investment  comes  under  consideration.  Is 
it  perfect  ?  Can  no  improvement  be  made  ?  At  pres- 
ent, the  banks  allow  it  to  be  assumed  they  resort 
only  to  Imperial  guarantee  stocks,  but  include  Indian 
bonds,  and  bank  stock.  The  wisdom  of  the  Court 
of  Chancery  in  investments  rules  the  Metropolitan 
Banks.  No  change  has  been  made  throughout  their 
history,  and  none  perhaps  will  be  unless  the  entire 
system  of  business  undergoes  revision,  and  substan- 
tial improvements  are  accomplished.  Consols,  like 
land,  are  the  foundation,  the  rock  upon  which 
national  security  rests  ;  the  surest  "  barometer "  of 
public  opinion,  and  the  index  which  best  determines 
the  strength  or  weakness  of  that  complex,  almost  un- 
definable  creation  called  "  the  Empire."  But  is 
nothing  safe,  except  consols  ?  Have  we  not  the  great 
resources  of  three  of  the  mightiest  countries,  the 
United  States  of  America,  the  Dominion  of  Canada, 
and  the  Australian  Colonies  ?  They  have  at  least  400,- 
000,000?.  of  securities  guaranteed  by  their  respective 
Governments, which  are  increasing  in  value  and  impor- 
tance. As  these  enlarge  in  population,  the  basis  of 
wealth  improves.  Nations  become  more  amenable  to 
public  opinion  ;  revenues  increase  ;  and  there  is  year 
bj^year  a  solid  foundation  to  rely  upon  in  dealing  with 
their  securities.  Again,  too,  it  should  be  remembered 
that  their  public  loans  represent  reproductive  works ; 
for  the  governments  being  paternal  in  character 
have  to  construct  railroads,  deepen  harbors,  supply 
water,  and  engage  largely  in  industrial  operations, 
which  in  other  cases  are  conducted  by  joint-stock 
companies.     In  a  word,  these  securities  are  not  for 


64  LONDON  BANKING  LIFE. 

war  or  wasteful  purposes  ;  while  the  security  of  the 
public  lands  is  largely  available  as  a  further  guarantee, 
the  revenues  are  constantly  increasing,  and  the  unde- 
veloped resources  of  great  tracts  of  country  have  yet 
to  be  fully  explored  and  developed.  It  should  be 
distinctly  understood  that  only  a  partial,  well-con- 
sidered proportion  of  deposits  should  be  so  invested. 
Some  banks  may  not  be  able  to  do  anything ;  others 
may  want  to  mature  experience ;  but  each  should 
determine  the  point  with  due  regard  to  the  results 
worked  out  by  the  suggested  analysis  of  deposits. 
There  can  be  no  doubt  that  first-class  English  invest- 
ments must  at  all  times  be  preferred,  and  upon  the 
whole  subject,  the  evidence  of  Mr.  Alderman  Salo- 
mons in  1858,  before  the  committee  on  commercial 
distress,  should  be  carefully  remembered,  showing 
the  course  then  pursued  by  the  London  and  West- 
minster  Bank : — 

"  Do  you  consider  Government  securities  a  good 
asset  in  the  event  of  pressure  ? — Undoubtedly ;  if 
that  is  not  good,  I  do  not  know  what  is. 

"  It  is,  of  course,  good,  subject  only  to  any  loss 
which  may  arise  from  a  forced  sale. — Just  so,  and  in 
1847  we  made  a  forced  sale  ;  we  sold  300,000Z.  con- 
sols at  that  time,  and  repurchased  them  at  a  loss  of 
20,000?.  But  no  doubt  consols  are  one  of  the  most 
ready  securities  which  a  bank  can  hold,  subject,  of 
course,  to  the  fluctuation  in  price. 

"  As  a  banking  security,  they  are  subject,  of  course, 
to  all  the  fluctuations  of  the  market  between  the 
time  at  which  you  have  to  buy,  when  they  are  gener- 
ally rather  high,  and  the  time  at  which  you  have  to 


SUGGESTIONS   FOR   THE  FUTURE.  65 

sell,  when  they  are  rather  low  ? — Just  so.  As  regards 
ourselves,  properly  speaking,  we  hold  consols  with 
our  own  capital ;  they  represent  our  own  capital." 

It  is  also  important  to  recollect  that  the  same  bank 
has  more  than  once,  after  times  of  great  excitement, 
proved  the  elasticity  of  its  resources  by  large  pur- 
chases of  consols — of  at  least  <£l,000,000in  1865,  after 
the  crisis  had  subsided;  and,  if  rumor  is  not  incor- 
rect, about  X500,000  in  1875.  And  it  may  be  well 
asked — why  not  invest  more  largely  ?  If  trade  is 
unable  to  supply  undoubted  bills,  should  not  first- 
class  securities  be  resorted  to  for  the  employment  of 
money  ?  Some  risk  may  have  to  be  incurred  when 
the  time  for  selling  arrives ;  but  what  is  that  com- 
pared to  inactivity,  a  dormant  policy,  a  losing  busi- 
ness? These  arguments  are  urged  only  so  far  as 
government  stocks  are  concerned,  as  it  would  at  least 
be  premature,  if  not  dangerous,  to  think  of  employ- 
ing "  banking  money "  on  ordinary  railway  shares, 
as  strangely  recommended  by  an  authority  which 
often  commands  public  attention.*  It  is  nevertheless 
true  that,  as  the  deposits  are  the  proper  inheritance 
of  banks,  so  the  absorption  of  the  money  becomes  a 
responsibility  that  must  be  incurred,  after  making  all 
wise  provision  for  present  safety  and  future  con- 
tingencies. There  is,  in  fact,  no  more  reason  for  not 
investing  than  there  is  in  waiting  for  a  wind  that 
fails  to  serve  when  it  does  blow ;  leaving  the  ship 
helpless  when  it  should  be  in  full,  free  motion. 

It  is  not  argued  that  bills  of  exchange  are  to  hold 
a  subordinate  position  among  banking  assets.     All 

*  The  Economist,  2d  of  October,  18T5. 

5 


66  LONDON  BANKING  LIFE. 

trade  in  every  country  depends  on  sucTi  instruments, 
and,  if  properly  circulated,  representing  producer  and 
exporter,  importer  and  merchant,  dealer  and  con- 
sumer, nearly  every  bill  dependent  on  a  foreign- 
grown  or  foreign  manufactured  article  requires  the 
intervention  of  a  banker.  There  may,  indeed,  be 
many  mediums,  each  banker  having  a  distinct  func- 
tion ;  yet  all  follow  the  course  of  business  in  dispens- 
ing credit,  and  helping  to  close  the  transaction. 
Bills  of  exchange  thus  become  of  vital  importance  to 
modern  banking,  notwithstanding  the  sweeping  de- 
nunciations of  some  modern  writers  on  the  danger  of 
widespread  manufacture,  and  of  their  being  "  cre- 
ated "  for  the  purpose  of  absorbing  deposits,  and  em- 
ploying capital  waiting  investment !  Lord  Overstone, 
in  his  evidence  in  1857,  shows  the  value  bankers 
should  attach  to  the  use  of  bills  of  exchange : — 

"  Are  not  the  parties  who  draw  bills  of  exchange 
capitalists  ? — The  parties  who  draw  bills  of  exchange 
may  be,  or  may  not  be,  capitalists. 

"As  a  general  rule,  is  it  not  the  custom  of  the 
merchants  of  this  country  to  carry  on  their  business 
by  means  of  bills  of  exchange  ? — No  doubt  about  it. 

"  Are  not  bills  of  exchange  the  representatives  of 
the  goods  manufactured  or  dealt  in  ? — I  hardly  know 
the  meaning  of  that  expression.  Bills  are  drawn 
very  often  in  consequence  of  sales  of  goods  made, 
very  often  in  consequence  of  credit  granted ;  they 
are  sometimes  drawn  as  arising  out  of  exchange  trans- 
actions, sometimes  out  of  dealings  in  commodities. 

"  Are  they  not  as  much  the  representative  of  the 
stock  of  the  merchant  or  manufacturer  as  the  bank 
paper  which  you  stated  was  the  mere  representative 


SUGGESTIONS    FOR   THE   FUTURE.  67 

of  gold  or  the  shadow  of  gold  ?  No,  I  do  not  think 
they  are.  The  bank  paper  is  the  representative  of 
gold,  because  it  is  the  certificate  of  gold  placed  in 
deposit  against  it ;  but  a  bill  drawn  is  by  no  means 
the  certificate  of  goods  in  that  sense  of  the  word. 

"  The  merchant  draws  a  bill  on  the  faith  of  goods 
he  is  either  making  or  has  sent  abroad  ? —  Take  any 
particular  transaction,  there  is  no  doubt  about  what 
the  fact  is.  A  person  shijDS  goods  abroad,  and  draws 
a  bill  upon  the  person  abroad  to  whom  he  ships  these 
goods,  or  he  draws  a  bill  upon  the  merchant  at  the 
port  through  whom  he  ships  them.  That  bill,  no 
doubt,  has  a  commercial  relation  to  the  commodity  so 
shipped,  but  it  has  not  a  relation  similar  in  its  nature 
nor  in  its  effects  to  that  which  the  bank  note  has  to 
the  bullion  deposited. 

"Is  not  his  object  to  get  money? — No;  getting 
money  is  not  the  object  in  drawing  the  bill.  Getting 
money  is  the  object  in  discounting  the  bill." 

The  wide  significance  thus  given  to  bills  of  ex- 
change as  a  necessity  of  trade,  makes  the  discounting 
of  such  paper  the  first  duty  of  a  well-conducted 
bank,  which  must  keep  in  view  the  principles  of 
shortening  credit,  anticipating  the  payment  of  money, 
meeting  the  demands  of  commerce,  and  facilitating 
financial  transactions. 

It  would  be  profitable  to  trace  accurately  the 
amount  of  acceptances  current  at  an}^  one  time,  and 
available  for  discount  by  the  Metropolitan  Banks. 
Although  it  is  not  possible  to  arrive  at  an  exact  con- 
clusion, there  are  statistics  to  assist  in  arriving  at  ap- 
proximate results.  There  are  at  least  two  great 
sources  of  information  which  are  beyond  dispute  : — 


68  LONDON  BANKING  LIFE. 

ACCEPTANCES  OF  METROPOLITAN  JOINT-STOCK  BANKS. 

30th  June.  31st  December. 

London  and  Westminster...  £1,087,311  £1,235,939 

London  Joint  Stock *  4,517,000  4,517,700 

London  and  County 1,960,488  2,162,096 

Union 4,402,218  4,176,153 

City 3,390,620  3,150,941 

Imperial 735,871  541,483 

London  and  South- Western .              4,381  4,450 

Consolidated 180,569  221,476 

Central 827  nil. 

AUiance 582,892  641,777 

£16,862,177  £16,651,315 

ACCEPTANCES    OF    SCOTCH   JOINT-STOCK   BANKS    FROM    THEIR   LATEST 

REPORTS  :— 

30tli  June.  Slst  December. 

Bank  of  Scotland £1,442,774  £1,977,986 

British  Linen  Company 245,604  245,605 

City  of  Glasgow 855,457  855,457 

Clydesdale 256,176  332,612 

Commercial  Bank  of  Scotland         432,624  523,774 

National  Bank  of  Scotland.  .    tl,224,454  tl>101,800 

Royal  Bank  of  Scotland....         422,748  406,210 

Union  Bank  of  Scotland  . . .         219,135  166,943 


£5,098,972  £5,612,381 

ACCEPTANCES    OF   AUSTRALIAN  JOINT-STOCK  BANKS  :— 

30th  June.  Slst  December. 

No  accurate  details  can  be  as- 
certained from  the  published 
Reports,  but  taking  a  well- 
known  proportion  of  accept- 
ances upon  the  capital  and 
business  of  the  respective 
Banks,  the  amount  estimated 
is  about £2,000,000  £2,500,000 

ACCEPTANCE  OF  MISCELLANEOUS  BANKS  :— 

30th  June.  Slst  December. 
Including  Indian,  Egyptian  and 
other  foreign  States,  adding 
thereto  an  estimate  of  Pro- 
vincial Banks'  acceptances, 
the  amount  may  be  calculat- 
ed at £3,392,251  £4,000,000 


*  The  only  return  issued  was  on  the  Slst  of  December,  1873. 
t  Including  letters  of  credit. 


SUGGESTIONS   FOR   THE  FUTURE.  69 

The  other  acceptances  afloat,  such  as  those  of  the 
Liverpool,  the  Manchester  banks,  and  of  the  great 
manufacturing  towns  are  not  of  large  amount.  The 
banks  connected  with  Canada  and  the  United  States 
of  America  also  issue  bills  of  exchange.  On  the  other 
hand  the  acceptances  of  large  finance  houses,  like 
Rothschilds',  Barings',  Brown,  Shipley  and  Co.,  and 
other  eminent  firms,  to  say  nothing  of  those  connected 
with  the  centres  of  European  commerce,  must  be  an 
important  item  in  the  discount  market, — paper  such 
as  theirs  never  being  doubted,  and  its  real  value  as 
high  as  that  of  any  bank.  All  these  points  furnish 
data  for  estimating  the  amount  of  bills  connected 
with  the  external  trade  of  the  country ;  or  more  prop- 
erly speaking,  the  exports  from  India,  the  Colonies, 
and  foreign  ports,  not  simply  the  portion  imported 
into  this  country,  but  all  trade  of  that  kind  through- 
out the  world  which  has  its  centre,  and  must  termin- 
ate financially,  in  the  ever-varying,  troubled  waters 
of  the  London  Money  Market. 

Another  class  of  bills  of  exchange  represents  the 
internal  trade  of  a  country.  There  have  been  many 
methods  for  ascertaining  the  amount  of  paper  in  cir- 
culation, more  or  less  available  for  discount,  accord- 
ing to  the  exigencies  of  the  holders.  The  only  prac- 
ticable calculation  is  to  amalgamate  loans  and  dis- 
counts ;  then  take  a  population  of  200,000,  and 
allowing  21Z.  per  head,  it  is  found  that  bills  are  under 
discount  for  4,200,000/. ;  then  give  the  same  amount 
to  a  population  of  32,000,000,  and  there  is  reasonable 
ground  for  concluding  that  672,000,000/.  would 
represent  the  floating  credit  between  traders,  all  of 


70  LONDON  BANKING  LIFE. 

which  must  either  be  under  discount,  or  ready,  if 
required,  for  that  purpose.  This  is  only  a  vague 
method  for  determining  statistical  results ;  but  it  will 
at  least  serve* to  show  that  banks'  capital  and  the  de- 
posits of  the  public  have  a  large,  if  not  an  absolutely 
sufficient,  ground  for  sound  and  profitable  operations. 
How  are  good  bills  to  be  obtained,  and  bad  paper 
avoided  ?  The  difficulty,  admitted  by  all  who  know 
anything  of  modern  banking,  must  be  more  than  ever 
felt,  as  proved  by  recent  events.  The  question  may 
be  best  answered  by  determining  if  brokers  offer  the 
best  machiner}'  for  obtaining  sound  paper  for  dis- 
count. "  These  men,  constantly  moving  about,  make 
it  their  business  to  become  acquainted  witli  the  re- 
quirements of  both  parties,  and  are  able  to  adapt 
them  to  each  other  with  greater  mutual  advantage 
than  could  otherwise  be  accomplished.  But,  in  this 
way,  a  broker's  requirements  are  not  really  his  own, 
but  those  of  the  public  who  find  it  expedient  to  trans- 
act their  business  through  him.  And  so  it  is  with 
the  money  broker  :  he  merely  deals  with  bills  instead 
of  produce  or  manufactured  goods,  and  under  ordi- 
nary circumstances,  is  able  to  make  the  daily  financial 
supplies  and  demands  of  his  various  customers  bal- 
ance pretty  evenly,  while  at  the  same  time,  rates  are 
to  a  great  extent  equalized  by  his  intervention."  * 
But  then,  on  the  other  hand,  it  is  asserted  that 
discount-houses  have  become  inevitable  from  the 
requirements  of  an  ever-extending  trade,  that  the 
wants  of  the  country  have  necessitated  the  conversion 
of  the  middle-man  into  a  principal,  who  makes  a  cal- 

*  From  a  pamphlet — "  The  Bank  of  England  and  the  Discount-houses." 


SUGGESTIONS  FOR   THE  FUTURE.  71 

culation  of  what  amount  of  such  paper  he  may  rea- 
sonably expect  to  keep  placed  on  the  market,  and  to 
that  extent  provides  for  his  clients  an  amount  of  ac- 
commodation which  otherwise  could  only  be  obtained 
by  them  at  a  sacrifice  of  much  valuable  time."  *  In- 
stead, therefore,  of  a  broker,  in  the  true  sense  of  the 
term,  there  is  a  competitor  with  banks  ;  the  race  is  to 
the  swift  in  easy  times;  the  active  "negotiator" 
obtains  the  best  bills,  and  a  large  supply  of  money, 
mostly  from  Scotch  and  country  banks,  and  the 
great  provincial  capitalists  who  follow  exchange  and 
bullion  transactions.  The  broker  has  thus  a  tempo- 
rary, fitful  occupation  ;  being  compelled  to  buy  his 
money  dear  and  sell  it  cheap;  outbidding  in  his 
changing  career  all  who  attempt  to  enter  the  market 
against  him,  while  the  cupidity  of  those  who  prefer 
hio-h  rates,  is  often  based  on  uncertain  securities, 
with  the  inevitable  result  of  vicious  trading. 

Should  the  banks  follow  these  shadows  of  the 
financial  world  ?  There  is  not  now  the  broker — sage, 
inquisitive,  well  informed — such  as  existed  in  earlier 
days,  when  commerce  was  more  concentrated  than  at 
present.  Indeed,  it  is  in  no  spirit  of  antagonism  the 
assertion  is  made,  that  there  are  no  brokers — abso- 
lutely none — who  have  capital  of  their  own  which 
can  be  relied  on  as  a  guarantee  for  large  transactions 
with  banks.  The  time,  indeed,  has  arrived  for  deter- 
mining whether  brokers,  as  a  class,  are  deserving  of 
any  encouragement — whether,  as  in  1860,  they  should 
not  be  made  to  depend  upon  their  own  resources, 
not  on  those  of  banks.     There   is,  however,  a  need 

*  From  a  pamphlet—"  The  Bank  of  England  and  the  Discount-houses." 


72  LONDON   BANKING   LIFE. 

for  more  large  wealthy  companies  to  conduct  dis- 
count operations,  and  the  period  is  opportune  for 
suggesting  the  establishment  of  institutions  to  supple- 
ment the  power  and  the  business  of  banks.  No  better 
remedy  for  some  of  the  present  defects  could  be 
found  than  a  strong,  well  organized,  and  substantial 
enterprise  of  that  nature. 

The  natural  consequence  of  avoiding  rather  than 
encouraffino:  business  with  brokers  would  be  for  the 
banks  to  be  more  restricted  than  at  present  to  opera- 
tions with  their  own  constituents.  There  would  then 
be  a  full  knowledge  of  the  customer's  proceedings  ; 
no  registry  or  "  clearing  office  "  necessary  ;  informa- 
tion, as  required,  would  be  forthcoming;  not  as  rumor 
or  second-hand,  but  authentic,  positive,  and  reliable 
intelligence. 

Great  frauds  would  also  be  less  likely  to  occur 
than  at  present ;  the  creation  of  paper  would  be  lim- 
ited ;  renewal  become  impossible ;  borrower  and 
lender  would  be  brought  face  to  face  for  mutual  ex- 
planations, and  difficulties  largely  obviated.  The  sig- 
nificant fact  of  the  principal  holder  of  recent  dishon- 
ored bills  having  no  account  with  the  largest  dis- 
counter could  not  have  occurred,  nor  would  there 
have  been  an  absence  of  all  kinds  of  personal  inter- 
course. The  bane  and  antidote  would  be  at  once 
understood  without  a  "  middle  man,"  the  scrambling 
for  bills  not  being  good  banking,  while  habits,  char- 
acter, and  method  of  trading  should  at  all  times  be 
integral  parts  of  a  sound  administration  of  credit.  It 
would  then  necessarily  follow  that  the  "  reference  " 
and  "  character  "  books  would  not  be  neglected  or 


SUGGESTIONS   FOE,   THE  FUTURE.  73 

give  forth  any  "  uncertain  sound ;  "  each  bank  would 
have  volumes  of  information,  accumulating  genera- 
tion after  generation,  for  the  guidance  of  successive 
managers.  Mistakes,  flagrant  errors,  deep  schemes 
of  fraud  or  forgery,  can  never  be  altogether  prevented, 
and,  as  with  life  in  general,  so  in  the  special  vocation 
where  greed,  rapacity,  and  covetousness  are  culti- 
vated, there  must  be  not  infrequent  losses,  and  those 
casualties  which  attach  to  great  competition  and  the 
ordinary  walks  of  commerce. 

A  more  frequent  publication  of  accounts  by  the 
Metropolitan  Banks  would  not  only  be  an  advantage 
to  the  commercial  community,  but  the  means  of  exer- 
cising a  beneficial  influence  on  the  current  business 
in  deposits  and  discounts.  The  want  of  oflicial  sta- 
tistics was  much  felt  between  May  and  August,  1866  ; 
also  during  the  half-year  ending  31st  December,  1875. 
In  the  first  named  period,  it  was  often  inquired, — 
Can  the  banks  maintain  their  ground  ?  Are  the  cur- 
rent balances  with  the  Bank  of  England  increasing? 
Is  paper  credit  diminishing  ?  Could  the  deposits  be 
repaid  on  any  sudden  demand?  More  recently  it 
has  been  inquired,  Have  the  joint-stock  banks  suffered 
in  public  estimation  ?  Are  deposits  being  rapidly 
withdrawn  ?  Have  the  losses  impaired  the  useful- 
ness of  banks  ?  Are  there  indications  of  confusion, 
want  of  steadiness,  or  absence  of  self-reliance  in  the 
management?  Information  on  these  questions  that 
would  have  settled  thoughtless  incredulity  or  con- 
firmed public  confidence,  would  have  been  valuable. 
Now  that  these  anxious  periods  have  been  safely 
passed,  attention  may  be  invited  to  the  most  valuable 


74'  LONDON  BANKING  LIFE. 

means  of  inspiring  public  faith  by  imparting  regular, 
frequent,  and  reliable  public  intelligence.     The  man- 
agement of  the  Imperial  Exchequer  was  never  better 
understood  than  since  the  publication  of  weekly  re- 
turns by  the  Government.     Every  one  instructed  in 
the  working  of  the  Issue  Department  can  follow  the 
movements  of  the  Bank  of  England  through  the  pub- 
lication of  their  accounts.     So.  too,  if  the  Metropoli- 
tan Banks  were  to  give  monthly  or  quarterly  returns 
of  their  affairs,  increased  confidence  in  their  proceed- 
ings would  follow^  without  any  diminution  of  their 
own  internal  power  or  usefulness.     In   the  United 
States  of  America,  the  importance  of  publicity  is  fully 
recognized,  for  the  New   York  "  Associated  Banks  " 
publish  weekly  returns.     Throughout  the  Australian 
colonies,  the  banks  supply  quarterly  accounts  show- 
ing all  variations  in  the   principal   departments    of 
business.     It  would,  therefore,  be  a  wise  concession 
for  London  banks  voluntarily  to  meet  the  public  de- 
mands on  this  important  requirement.     Should  Gov- 
erment  interposition,   however,   be  necessary,  there 
are  ample  proofs,  in  Sir  Robert   Peel's   great   speech 
in  1844,  on  banking,    that   he    contemplated   a   full 
revelation  of  all  figures   relating  to   the  public  in- 
terests, necessary  to  inspire  general  confidence. 


BANK  OF  ENGLAND.  75 


CHAPTER  X. 
BANK  OF  ENGLAND. 

"  The  Banking  Act  o/1844  is  entirely  the  Act  of  Sir  Robert  Peel,  and  the 
lasting  gratitude  of  this  counti^y  is  due  to  him  for  the  seiiiice  rendered 
to  it  hij  the  passing  of  that  Act.  He  has  never  beenproperhj  appreci- 
ated ;  but,  year  by  year,  the  character  of  that  statesman  vpon  this 
subject  will  be  appreciated.  By  the  Act  of  1844,  he  has  obtained  ample 
and  efficient  security  that  the  honest  foundation  of  our  moneta'ry  sys- 
tem shall  be  effectually  and  permanently  maintained,  and  no  inscrip- 
tion can  be  ivritten  vpon  his  statue  so  honorable  as  that  he  restored  our 
money  to  its  just  value  in  1819,  and  secured  for  us  themeans  ofm.ain- 
taining  that  just  value  in  1844." 

Lord  Overstone. 

It  is  a  singular»fact  that,  throughout  the  financial 
crisis — which  is  the  term  for  the  great  convulsions 
of  the  past  six  months — there  has  been  scarcely  an 
objection  to  the  working  of  the  Bank  Act  of  1844. 

The  exception  to  gratitude  comes  again  from  a 
limited  school  of  thinkers,  and  a  few  writers  only 
remembered  in  connection  with  the  Anti-Gold  League, 
who,  in  consistency  with  almost  traditionary  opinions 
on  the  currency,  still  complain  against  "  our  most 
anomalous  monetary  system."  They  wish  the  sub- 
ject discussed,  not  on  its  general  merits,  but  rather 
in  relation  to  the  oscillations  in  the  value  of  money. 
Why  are  upward  changes  made  in  the  rate  of  dis- 
count ?  Why  is  the  commercial  public  troubled  by 
mere  autumnal  movements  of  bullion  ?     Why  these 


76  LONDON   BANKING  LIFE. 

perturbations  about  a  million  or  two  to  the  Conti- 
nent ?  Then  they  assert  that  the  Bank  of  England's 
movements  were  ineftective  on  their  own  reserve,  and 
still  more  so  on  the  "open  market,"  which  ought  to 
be  entirely  and  legitimately  governed  by  the  "  law  of 
supply  and  demand,"  than  which  nothing  can  be  more 
perfect,  either  for  trade  in  general  or  for  the  actual 
business  of  money  dealers.  It  was  also  asserted  that 
"  these  irregular  proceedings  are  in  contravention  of 
the  spirit,  if  not  the  letter  of  the  law,  and  that  the 
legislature  never  contemplated  that  the  Bank  Direct- 
ors should  impose  on  the  mercantile  community  an 
artificial  demand  for  money,  in  order  to  obtain  rates 
of  discount  which  could  only  be  justified  by  a  real 
demand." 

The  fluctuations  in  the  value  of  money,  however, 
are  not  peculiar  to  the  epoch  through  which  trade  is 
now  passing.  By  tracing  through  a  long  period  the 
rate  of  interest,  or  the  allowance  made  by  brokers  on 
loans  at  call,  it  will  be  found : — In  1821  it  was  5  per 
cent. ;  in  the  early  part  of  1822  it  was  2i  per  cent. ; 
again,  in  1824,  the  early  part,  the  rate  was  2  per  cent. ; 
in  1825  it  was  5  per  cent. ;  in  the  middle  part  of  1826 
it  was  5  per  cent.  ;  and  again,  in  1827,  in  the  middle 
part,  it  was  2  per  cent. ;  in  1838  it  was  2J  per  cent.; 
in  1839,  the  latter  part,  it  had  risen  to  5i  per  cent. 
At  that  time,  the  partial  suspension  of  the  usury  laws 
had  come  into  action.  In  1840,  the  latter  part,  it 
was  5  per  cent. ;  in  1843  it  fell  to  2  per  cent.  There 
is  then  the  subsequent  period  for  which  the  Bank 
Act  of  1844  is  responsible ;  and  the  following  are  the 
results : — 


T/z 

per 

cent 

2 

2i 

2 

2 

2 

BANK  OF  ENGLAND.  77 

Highest.     Lowest. 

1844  to  1850 8  per  cent. 

1851  to  1855 -  .  6| 

1856  to  1860 10 

1861  to  1865 9 

1866  to  1870 10 

1871  to  1874 9 

The  average  rate  has  been  4  per  cent,  throughout  this 
long  and  important  period.  The  trade  of  the  coun- 
try has,  since  1844,  increased  about  fivefold;  great 
troubles  have  been  worked  out  successfully ;  and  no 
country  in  the  world  has,  throughout  the  last  thirty 
years,been  so  impregnable  in  its  commercial  system, 
more  content  with  its  progress  in  material  wealth,  or 
been  so  far  free  from  convulsions  in  credit,  currency, 
or  cash  payments. 

It  is  obvious  that  the  commercial  men  are  charmed 
with  the  working  of  the  Act  when  the  rates  move 
downwards  ;  and  the  terms  current  in  the  market  are 
most  complacently  accepted.  There  is  then  a  jubilant 
tone  of  satisfaction.  Such  was  the  case  from  June 
to  October  of  the  year  1875  while  the  commercial 
atmosphere  was  clearing  itself,  and  inflicting  unpar- 
alleled losses  on  Metropolitan  Banks.  The  average 
value  of  money  was  only  2f  per  cent,  per  annum ! 
Yet  there  has  been  no  benefit  to  trade,  no  stimulus 
to  manufactures,  but  a  positive  decline  of  exports,  in 
fact,  dreariness  and  almost  dismay  eveiy  where !  No 
previous  commercial  crisis  had  been  attended  with 
less  banking  strain :  money  was  a  drug,  and  the  only 
difficulty  has  been  how  to  employ  capital  safely  and 
profitably.  There  might  have  been  millions  of  bills 
from  St.  Paul's  and  Wood  Street  poured  into  Lom- 


78  LONDON   BANKING  LIFE. 

bard  Street  or  Lothbury ;  but  the  streams  of  business 
were  dried  up,  enterprise  had  forsaken  the  race  of 
merchants,  and,  instead  of  making  money,  they  took 
to  the  art  of  destroying  capital,  squandering  precious, 
hard-earned  wealth  in  folly,  extravagance,  and  reck- 
less speculation  I 

The  next  great  argument  against  the  Act  of  1844 
was  that  bullion  movements  are  ephemeral  and 
should  not  disturb  the  value  of  money.  It  must  be 
confessed  that  the  old  students  of  finance  have  the 
ever-recurring  difficulty  of  educating  their  opponents 
to  the  nice  distinctions  between  money  in  relation  to 
the  home  trade,  and  money  in  its  ultimate  bearings 
on  foreign  exchanges.  The  lesson  is  only  to  be 
learned  from  the  teachings  of  those  "  high  and  dry  " 
writers  of  abstract  science,  who  in  these  times  have 
only  a  few  real  disciples.  The  prophets,  who  are 
they  ?  Adam  Smith,  Gibbon  Wakefield,  Stuart  Mill, 
or  Jones  Lloyd,  are  often  ruthlessly  superseded  for 
vague  doctrinaires,  or  a  new  race  of  modern  profes- 
sors, whose  confessed  theories  can  never  be  put  into 
practice.  During  the  half-year  ending  1875  the  vari- 
ation in  the  stock  of  bullion  in  the  Bank  of  England 
has  been  from  28,627,950L  to  22,554,835^.  This 
enormous  difference  has  occurred  simultaneously 
with  an  import  of  gold  of  not  less  than  3,000,000Z. ; 
even  Mr.  Disraeli  would  not  call  this  a  "  mere  flea- 
bite,"  although  he  once  elegantly  so  described  the 
National  Debt ;  while  it  must  be  allowed  that  these 
perturbations  of  the  precious  metals  are  a  most  import- 
ant element  in  the  money  market,  whether  its  organ- 
ization be  perfect  or  imperfect.     Indeed,  the  whole 


BANK  OF   ENGLAND.  79 

trouble  does  not  rest  on  mere  autumnal  movements, 
or  the  export  of  "  a  million  or  two ;  "  but  on  a  (Ton- 
tinuous  drain  to  meet  the  exigencies  of  commerce, 
the  enormous  strides  other  countries  are  making  to 
assimilate  their  coinage  to  that  of  this  country  in 
obtaining  good  currency  laws,  and  in  resuming  cash 
payments.  Then,  have  the  movements  of  the  Bank 
of  England  been  ineffective?  Their  returns  show 
that  the  iieserves  of  coin  have  been  fully  sustained 
upon  sound  principles ;  that  ordinary  business  has 
been  carefully  followed ;  that  when  the  balances  of 
bankers  were  heavy  there  was  a  due  proportion  of 
cash  and  notes,  and  that  the  loans  and  discounts — 
shown  in  "  Other  Securities" — have  been  legitimately 
followed  as  the  index  representing  the  commercial 
demand  for  money. 

The  more  novel  point  of  the  relation  of  joint-stock 
banks  to  the  Bank  of  England  is,  however,  a  subject 
not  irrelevant  to  the  present  inquiry,  Look  at  the 
facts.  The  metropolitan  joint-stock  banks  have  a 
lending  power  of  nearly  100,000,000?.  as  shown  by 
their  last  balance-sheets,  while  the  Bank  of  England 
has  never  had  under  discount  more  than  35,000,000?., 
which  occurred  at  the  height  of  the  1866  panic.  This 
is  most  significant.  The  Bank  of  England  is,  there- 
fore, charged  with  too  much,  and  the  other  banks 
with  too  little  influence,  and  it  follows  that  the  Bank 
of  England  has  no  power  to  create  an  artificial  de- 
mand, to  disturb  the  laws  of  economic  science,  or  to 
imperil  the  safety  of  the  commercial  classes. 

There  is  more  to  be  feared  from  neglecting  to  follow 
the  movements  of  bullion,  than  from  the  imaginary 


80  LONDON  BANKING  LIFE. 

grievances  attached  to  the  mero  mechanical  working 
of  banks.  It  is  extraordinary  how  little  these  great 
subjects  are  studied,  yet  the  mightiest  revolution  is 
going  forward  so  far  as  the  precious  metals  are  con- 
cerned. The  wonderful  chapter  in  "  Macaulay's 
History  "  on  the  debasement  of  the  English  coinage 
and  its  improvement,  shows  also  that  the  precious 
metals  have  continued  to  be  the  best  circulating  me- 
dium in  Europe,  and  that  other  nations  have  followed 
the  example  of  England.  Lord  Liveri^ool's  work,  on 
the  operations  of  the  Mint,  might  well  be  reprinted 
with  other  famous  tracts  on  the  Currency  Laws  for 
the  benefit  of  modern  students.  But  withal,  it  is 
often  forgotten  how  great  and  arduous  a  task  has 
devolved  on  England  since  the  gold  discoveries. 
There  has  been  imported  into  Great  Britain  not  less 
than  500,000,000^.,  which  represents  the  only  true 
standard  of  value ;  it  has  been  distributed  throughout 
America  and  Europe — but  especially  in  France,  Italy 
and  Germany,  for  the  purpose  of  an  exchangeable 
commodity,  honestly  valued,  so  far  as  peoples  and 
governments  are  concerned.  It  has  been  a  mighty 
movement  from  which  England  has  had  all  the  profits 
in  transit,  and  it  has,  moreover,  had  the  advantage  of 
employing  its  industrial  classes  in  the  Colonies  and 
California  in  producing,  shipping,  and  distributing 
this  wealth  throughout  the  world. 


STOCK  EXCHANGE  INFLUENCES.  81 


CHAPTER  XI. 
STOCK  EXCHANGE  INFLUENCES. 

"  David  said  in  his  haste,  '  All  men  are  liars  ; '  yet  he  kneiv  nothing  of 
City  frauds,  of  hr(hhle  companies,  of  railway  swindles,  of  iiisensate 
fjambling,  and  7-uinoiis  betting  transactions. 

"Even  members  of  an  association  founded  on  the  strictest  principles  of 
honor,  may  be  accused  of  being  scoundrels  and  rogues,  ivithout  draw- 
ing doion  any  thunders  of  Jove. 

"  Betting  has  as  many  votaries  as  the  v:orship  of  Dionysius,  in  ancient 
Greece,  but  their  modern  imitators  are  grown  men,  in  their  natural 
seiises,  the  peculiarity  of  the  vice  seeming  that,  like  dipsomania,  it  is 
not  only  incurable  but  aggressive." 

"  The  World  "  Newspaper. 

There  is  a  view  of  Stock  Exchange  operations  not 
often  considered  by  those  who  have  to  trace  their  in- 
fluence on  tlie  thoughts  and  actions  of  mankind. 
This  view  is  dependent  on  the  enormous  growth  of 
business  which  claims  attention  from  year  to  year. 
Without  going  into  minute  details,  there  is  much  to 
understand  from  Wettenall's  Daily  Lists,  and  to  en- 
able a  comparison  to  be  made  of  the  most  important 
epochs  of  the  century,  decennial  points  are  taken 
starting  with  1840,  and  ending  with  1860.  Subse- 
quently it  is  more  important  to  follow  the  particulars 
admirably  furnished  by  Messrs.  Spackman  and  Son's 
annual  lists,  which  give  the  details  of  all  new  under- 
takings. 

6 


82 


LONDON  BANKING  LIFE. 
In  1840. 


Railways  : 

Nominal 

Paid  up 

Mines  : 

Nominal 

Paid  up 

Joinf  Stock  Banks : 

Nominal 

Paid  up , 

Miscellaneous  : 

Nominal 

Paid  up 

Total 


£ 

£ 

45,000,000 

•• 

38,920,000 

18,325,000 

•• 

11,960,000 

31,902,500 

•• 

8,775,000 

89,820,000 

•• 

47,375,000 

£185,047,500 

107,030,000 

In  1850. 


Raihuays : 

Nominal. 
Paid  up . . 


Mines : 

Nominal. 
Paid  up . . 


Joint  Stock  Banks ; 
Nominal .... 
Paid  up 


Miscellaneous : 
Nominal. 
Paid  up. . 


Total , 


£ 

228,500,000 


5,650,000 


20,260,000 


2,784,000 


£256,194,000 


£ 

180,250,000 

4,793,000 
7,500,000 
1,495,400 


194,038,400 


In  1860. 


Railways : 

Nominal. 
Paid  up . . 


Mines  : 

Nominal. 
Paid  up . . 


Joint  Stock  Banks : 

Nominal 

Paid  up 


Miscellaneous : 
Nominal. 
Paid  up.. 


Total. 


£ 

385,000,000 


6,400,000 
36,616,000 
31,110,000 


£459,126,000 


£ 

350,000,000 

5,460,000 
16,836,000 
24,540,000 


396,836,000 


STOCK   EXCHANGE   INFLUENCES. 


83 


1870. 


Companies  * 


Banking 

Kailvvay 

Sanitary 

Home  Enterprises 

Foreign  Loans. 

Alabama,  8  per  cent 

Buenos  Ayres,  6  per  cent. . 

Chilian,  5  per  cent 

Kgyptian,  7  per  cent 

French,  G  per  cent 

Honduras,  10  per  cent 

Massachusetis,  .">  per  cent. 
Montevidean,  6  per  cent. . . 

Japan,  9  per  cent 

North  German,  5  per  cent.. 

Peruvian,  6  per  cent 

Koumanian,  1%  per  cent  . . 

Ilitto       7  per  cent 

Russian,  5  per  cent 

Spanish,  5  per  cent 

Tasmauian,  6  per  cent 

Total 


Capital  Offered 


£ 

300,000 

2,115.000 

42.'i,000 

ll,S2(),2(;(i 

£14,600,i;CO 

450,000 

l,o;U,700 

1,012,700 

7,142,S(;0 

10,(1(10,000 

2,5(KI,000 

GIO.SOO 

3,000,000 

l,0OO.i  00 

7,500,000 

11.020,000 

(iOO,000 

43^,3:11 

12,000,000 

2,31X,100 

100,000 


£76,292,757 


Called  up. 


£ 

80,000 

290,2,50 

101, .500 

4,121,975 

£4,599,725 

425,2.50 

910,.536 

840,541 

5,0)07,098 

4,000,000 

2,000,000 

.53:1,226 

750,000 

9S0,000 

2,200,000 

7,4.50,000 

432,000 

373,498 

9,(i00.000 

1,N54,480 

100,000 


£42,602  ,.354 


187 


Companies,  t 


Banking . 

Kailway 

Sanitary 

Home  Enterprises 

FoRKioN  Loans. 

A rgentine,  6  per  cent 

Brazilian,  5  per  cent 

Costa  Kica,  6  per  cent 

Ditto  ditto       

French,  5  per  cent 

Georgia,  U.  S.,  7  per  cent 

Ditto  ditto     

Louisiana,  8  per  cent 

Liberian,  7  per  cent 

Massachusetts.  5  per  cent 

Moscow  Kouisk  Railway,  6  per  cent 

Paraguay.  5  per  cent . . ." 

Roumanian,  8  per  cent 

Russian,  5  per  cent , 

Spanish,  3  per  cent 

Ditto    6  per  cent 

United  .States,  5  per  cent , 

Ditto  ditto        

Uruguay,  6  per  cent 

Total 


Capital  Offered 


£ 

225,000 
34,615,078 

170,000 
25,198,580 


£60,208,658 

6,122,400 

3,0  0,000 

500.000 

500.000 

80,000,000 

225,000 

315,000 

450,000 

100,000 

300,000 

1,700,000 

1,000,000 

17,550,000 

12,000,000 

6,.375,000 

2,622,781 

45,000,000 

16,875,000 

3,500,000 


£258,343,839 


Called  up. 


£ 

22, .500 
19,0;;0,513 

70,000 
10,207.858 


£29,230,871 

5,418,324 

2,670,000 

360,000 

125,000 

26,960,000 

175,.500 

245,700 

337,500 

85,000 

273,000 

340,000 

.3.50,000 

13,162,500 

9,780,000 

1,976,250 

2,098,160 

40,9.59,000 

15,350,250 

875,000 


£150,772,055 


*90  New  Compames, 


1 196  New  Companies. 


84 


LONDON   BANKING   LtFB. 

1872. 


Compaiiies.* 


Banking 

Kail  way 

Sanitary  

Home  iinterp rises 

FoKEiGN  Loans. 

Argentine,  6  per  cent 

Arkansas,  7  per  cent 

Bolivian,  6  per  cent 

Boston  City,  5  per  cent 

Canada  (Quebec),  G  per  cent. 

Costa  Kica,  7  per  cent  

French,  5  per  cent 

Hungarian,  5  per  cent 

Massachusetts,  5  per  cent — 
New  iTork  City,  6  per  cent. . . 

Ottoman,  9  per  cent 

Pariiguay,  8  per  cent 

Peruvian,  8  per  cent 

Russian,  5  per  cent . 

Spanish,  3  per  cent 

Washington  City,  6  per  cent 

Total 


Capital  Offered 


£ 

8,420,000 
25,602,300 

2,755,000 
39,290,395 


Called  up. 


£76,007,695 


1,225,000 

487,125 

1,700,000 

400,000 

100,000 

2,400,000 

160,000,000 

3,000,000 

443,500 

3,375,000 

11,120,200 

2,000,000 

15,000,000 

15,000,000 

10,625,000 

900,000 


£303,849,520 


£ 
1,267,500 
18,869,408 

713,000 
16,998,412 


£37,848,320 


931,000 

316,615 

1,156,000 

300,000 

100,000 

1,968,000 

45,600,000 

2,430,000 

412,445 

3,121,875 

10,959,307 

1,400,000 

11,625,000 

13,350,000 

743,750 

787,500 

£133,049,812 


1873. 


Companies.t 


Banking 

Railway 

Sanitary  

Home  Enterprises 


Foreign  Loans. 

Buenos  Ayres,  6  per  cent . . 

Chilian,  5  per  cent 

Egyptian,  7  per  cent 

Hungarian,  5  per  cent 

Ditto,  6  per  cent 

Japanese,  7  per  cent 

Russian,  5  per  cent 

Turkish,  6  per  cent 

United  States,  5  per  cent.. 

Total 


Capital  Offered 


£ 

2,913,000 
32,755,990 

1,069  550 
43,607,239 


£80,345,779 


2,040,800 

2.276,500 

32,000,000 

5,400,000 

7,500,000 

2,400,000 

15,000,000 

2,223,460 

60,000,000 


Called  up. 


£ 

428,650 
20,534,099 

585,050 
15,748,379 


£37,296,178 


306,120 

2.1.39,910 

16,960,000 

4,320,000 

1,500,(100 

2,180,000 

3,000,000 

655,903 

54,600,000 


£209,186,539 


£122,958,111 


*  234  New  Companies. 


t  206  New  Companies. 


STOCK   EXCHANGE  INFLUENCES.  85 

1874. 


Companies.* 


Banking 

Railways 

Sanitary 

Home  Enterprises . 


Foreign  Loans. 

Belgian,  3  per  cent 

Canadian,  4  per  cent 

Hungarian.  6  per  cent 

Ottoman,  5  per  cent 

Santa  Fe,  7  per  cent 


Total. 


Capital  Offered 

Called  up. 

■  £ 

£ 

3,020,000 

295,000 

21,194,000 

14,923,035 

3,238,000 

804,480 

18,084,400 

9,859,755 

£45,530,460 

£25,882,270 

1,440,000 

1,087,200 

4,000.000 

3,600,000 

7,500,000 

4,875,000 

15,900,000 

5,406,000 

300,000 

276,000 

£74,676,160 

£41,126,470 

1875. 


Companies,  t 


Banking 

Railways 

Sanitary 

Home  Enterprises 

Foreign  Loans 

Brazilian,  5  per  cent 

Russian,  4i^  per  cent , 

Swedish,  41/2  per  cent 

Total 

*  128  New  Companies. 


Capital  Offer  e 

\ 


£ 
100,000 

12,615,000 

290,000 

8,436,000 


Culled  up. 


£ 
25,000 

8,701,800 

143,500 

4,646,900 


£21,441,000 
5,000,000 
8,000,000 
1,000,000 


£35,441,000 


£13,517,200 

4,825,000 

7,360,000 

987,500 


£26,689,700 


t  02  New  Companies. 


86  LONDON  BANKING  LIFE. 

The  extraordinary  mass  of  business  shown  by  these 
statistics  raises  important  considerations.  Is  it  all 
sound,  to  be  relied  on  by  bankers,  as  the  result  of 
well  directed  energy?  Or  is  it  like  the  "bubble repu- 
tation," in  many  respects  of  ephemeral  character,  the 
emanation  of  base  speculation,  of  reckless  trading, 
and  of  things  begun  in  haste,  continued  in  doubt, 
culminating  in  folly  or  fraud?  An  analysis  of  the 
enterprises  must  be  made  to  determine  these  ques- 
tions; and  the  student  of  finance  has  to  bear  the 
points  in  view  when  daily  reading  reports  of  meet- 
ings, fluctuations  in  prices,  and  the  ebb  and  flow  of 
business  on  the  Stock  Exchange. 

There  is,  moreover,  the  principle,  that  the  legiti- 
mate home  enterprises  may  be  distinguished  from 
those  which  are  "conceived  and  born"  of  vicious 
speculation.  The  foreign  and  colonial  loans  may  also 
be  distinguished  in  their  ends  and  objects ;  some  be- 
ing for  bolstering  up  weakness  in  finance,  the  linger- 
ing decay  of  empires,  or  the  wasteful  extravagance 
of  war.  Other  loans  are  for  the  development  of 
trade,  opening  up  new  countries,  and  the  honorable 
enterprises  of  young  and  thriving  communities. 

The  Joint-Stock  Companies  Act  of  1855  was  the 
great  turning  point  in  the  enterprise  of  England,  and 
without  detailing  the  subsequent  modifications  of  the 
Act,  its  objects  were  to  provide  for  registration,  de- 
claration of  objects,  limited  liability,  publication  of 
returns,  honest  dividends,  punishment  of  fraud ;  for 
calls  to  be  absolutely  paid  in  cash,  not  by  notes  or 
obligations  to  pay ;  and  for  loans  not  to  be  made  on 
the  shares  of  such  companies. 


STOCK  EXCHANGE  INFLUENCES,  87 

There  has  for  some  years  been  a  steady  adherence 
to   the   principle   of  limited   liability  in  new  Joint- 
Stock  Companies.  Yet  no  inquiry  has  been  diligently 
pursued  as  to  the  working  of  the  principle,  or  the 
influence   of   recent   undertakings    on  general  com- 
merce.    The  most  forcible  objections  to  limited  lia- 
bility came  from  those  who  instinctively  understood 
the  art  of  sound  enterprises,  and  had  carefully  fol- 
lowed the  expanding  influence  of  commerce  under 
free  trade  and  the  gold  discoveries.     Their  predic- 
tions were  that  it  would  "  prove  seriously  destructive 
of  the  sober  and  substantial  virtues  of  the  mercan- 
tile character.     By  weakening  in  the  mind  of  the 
trader  the  sense  of  full  responsibility  for  the  conse- 
quences of  all  his  actions,  and  limiting  the  obligation 
which  now  rests   upon  him  to  return  in  full  all  that 
he  has  borrowed   from    others,  the   general    tone   of 
commercial  morality  must  be  deteriorated.    By  limit- 
ing the  unfortunate  consequences  of  failure,  whilst 
no  corresponding  limitation  is  placed  upon  the  gains 
which  may  attend  success,  the  due  equipoise  between 
the  restraints  and  the  stimulants  to  enterprise  and 
speculation,    upon    which   depend   the   solidity  and 
safety  of  the  commercial  system,  rnust  be  disturbed. 
By  enabling  parties  to  put  a  fixed  limit  to  the  amount 
of  possible  loss,  the  chief  incentive   to    caution    or 
vigilance  in  the  conduct  of  business  will  be  taken 
away  or  seriously  weakened ;  whilst  by  leaving  the 
hope  of  gain  unrestricted  and  indefinite,  a  gambling 
spirit  will  be  introduced  into  commercial  transactions, 
and  the  risks  of  trade  will  assimilate  themselves  to 
the  chances  of  the  lottery  wheel  rather  than  to  what 


88  LONDON   BANIONG   LIFE. 

they  are  now — the  legitimate  results  of  hopeful  in- 
dustry  and   cautious   enterprise."     There    were   no 
modifying  restrictions  to  guard  "  against  the  danger, 
first,  of  excessive  and  reckless  enterprise,  naturally 
generated  by  the  sense  of  strict  limitation  of  risk ; 
and   second,   of  fraudulent   abstraction,   under   the 
form  of  interest  or  profits,  or  that  specific  and  fixed 
amount  of  capital  which  is  alone  appropriated  as  the 
security  of  the  honest  creditor."     It  was  properly 
urged  that  "  profits  in  trade  consist  of  interest  upon 
capital,  remuneration  for   labor  and   skill,  and  pre- 
mium of  insurance  on  risk.     In  proportion    as   the 
risk  in  any  business  is  great,  profits  are  usually  high  ; 
but  of  these  high  profits  a  large  share  is,  by  every 
honest  trader,  set    aside   as   the   })remium   reserved 
against   high    risks.     Then    as   regards  the  Limited 
Liabilities  Act,  the  object  is  to  enable  concerns  to 
limit  their  liability  to  a  certain  fixed  sum,  which  has 
no  reference  to  the  varying  magnitude  of  the  risks 
which  they  incur,  or  to  the  high  profits  which,  through 
those  risks,  they  are  appropriating  to  themselves,  but 
not  reserving  for  the  honest  protection  of  their  cred- 
itors."    It  was  foreseen  that  "  the  sober  calculations 
and  legitim.ate  transactions  of  real  trade  would  give 
way  to  a  general  spirit  of  speculation  in  hazardous 
enterprises  and  jobbing  in  shares — a  state  of  things 
which  the  history  of  1824  and  1825  affords  a  practi- 
cal  illustration,  and   at   the   same  time  holds  out  a 
warning   example."     The  measure,  as  predicted  by 
its  supporters,  would  be  "  to   restrict  rather  than  to 
increase  credit,  by  filling  the  community  with  a  mass 
of  concerns  notoriously  undeserving  of  public  confi- 


STOCK  EXCHANGE   INFLUENCES.  89 

dence.  The  consequence  must  be  a  serious  injmy  to 
commercial  character  abroad,  a  diminution  of  the 
confidence  which  other  countries  repose  in  the  en- 
gagements of  merchants  and  traders,  an  interruption 
to  the  ease  and  freedom  with  which  all  trading  inter- 
course with  the  world  is  at  present  conducted,  and 
in  the  end  absolute  pecuniary  loss  to  England.  The 
tendency  of  the  measure  must  be  to  extend  and  in- 
tensify these  evils,  by  giving  facility  for  the  wide- 
spread introduction  of  joint-stock  companies — reck- 
less in  their  procedure  because  protected  by  limited 
liability,  and  filling  the  community  with  the  instru- 
ments of  gambling  in  the  form  of  shares  upon  which 
little  or  nothing  has  been  paid  up.  Important  changes 
of  the  laws  which  affect  the  monetary  or  commercial 
system,  however  sound  may  be  the  principles  on 
which  they  rest,  are  almost  invariably  followed  by 
rapid  and  excessive  development,  leading  to  temporary 
but  serious  embarrassment."  Such  were  the  views 
•Lord  Overstone  expressed  before  the  ])assing  of  the 
Limited  Liability  Act,  and  the  protest  embodying 
these  opinions  will  always  be  classed  among  the  most 
important  records  of  parliamentary  proceedings. 

There  is  ii  difficulty  in  giving  precise  data  for  de- 
termining the  effects  of  the  Acts  of  1855  and  1862, 
but  the  defunct  and  moribund  companies  abound  in 
every  street,  and  their  glaring  titles  are  an  offence  on 
many  a  door  jamb  or  lintel. 

The  returns  to  the  House  of  Commons  on  these 
companies  being  without  summaries  or  analyses  are 
at  present  almost  useless  for  reference.  It,  however, 
appears  from  the  latest  return  that  in   1874  out  of 


90  LONDON  BANKING  LIFE. 

1076  Companies,  1046  were  in  operation,  or  supposed 
to  be,  and  30  were  being  wound  up.  The  same  re- 
turn shows  that  the  1076  limited  companies  were 
registered  with  a  nominal  capital  of  <£  11 0,540,000  ! 

Stock  Exchange  operations  require  to  be  placed  by 
banks  more  completely  under  control  than  at  present. 
It  is  too  obvious  that  gambling  has  become  a  national 
vice,  a  very  prominent  feature  of  English  society, 
pervading  all  classes  and  entering  into  nearly  every 
pursuit.  Speculations  are. also  widely  entered  into 
without  care  or  knowledge.  Extravagance,  luxury, 
and  self-indulgence,  are  painfully  manifested  by  those 
who  live  on  the  property  of  their  creditors.  These 
are  heavy  charges,  yet  if  each  be  examined  in  turn, 
the  result  will  be  that  the  section  of  the  commercial 
community  with  which  banks  are  deeply,  if  not  inti- 
mately concerned,  are  frequently  the  most  culpable. 

"  Gambling  "  is,  indeed,  the  paramount  vice  to  be 
dealt  with,  so  far  as  great  borrowers  are  concerned. 
A  former  generation  addicted  itself  to  cards,  dice,  and 
other  games  of  chance,  until  legislative  enactments 
became  necessary  to  banish  gamesters  from  taverns, 
clubs,  and  more  ordinary  places  of  resort.  This  gen- 
eration has  witnessed  great  operations  in  railroads, 
in  "Limited"  companies,  in  finance  undertakings. 
There  have  been  monopolies  of  cotton,  tobacco,  rice, 
and  silk.  The  metal  markets  have  been  invaded  too 
by  a  race  of  adventurers,  until  they  were  "  scared  " 
by  their  own  imprudence.  There  is  a  reaction  as  to 
foreign  loans ;  month  after  month  governments  profit 
by  repudiation  or  actual  insolvency,  and  England 
is  the  acknowledged  victim   of  swindlers,  base   in- 


STOCK  EXCHANGE  INFLUENCES.  91 

triguers,  low  schemers,  and  sometimes  of  self-convicted 
"blacklegs,"  who  have  been  exposed,  disgraced,  and 
expatriated  members  of  coarse.,  vulgar  and  debased 
European  communities.  These  statements,  though 
in  appearance  strong,  are  susceptible  of  proof  from 
the  Report  of  the  Foreign  Loans  Committee.  But, 
then,  what  is  said  of  the  victims?  Pity  would  be  a 
false  sentiment,  and  unacceptable.  Silent  contempt 
is  unproductive  of  benefit.  Satire  and  rebuke  might 
be  availing,  if  there  were  again  a  censor  like  Sidney 
Smith,  when  he  remarked  that  "  among  the  discussions 
to  which  the  moral  lubricities  of  insolvent  people 
have  given  birth,  they  have  arrogated  to  themselves 
the  right  of  sitting  in  judgment  upon  the  property  of 
their  creditors,  of  deciding  who  among  them  is  rich 
and  who  poor,  and  who  are  proper  objects  of  compas- 
sionate payment ;  but,  in  the  name  of  Mercury,  the 
great  god  of  thieves  !  did  any  man  ever  hear  of 
debtors  alleging  the  wealth  of  the  lender  as  a  reason 
for  eluding  the  payment  of  a  loan?  Is  the  Stock 
Exchange  a  place  for  the  tables  of  the  monej'-lenders, 
or  is  it  a  school  of  moralists,  who  may  amerce  the 
rich,  exalt  the  poor,  and  correct  the  ine(|ualities  of 
fortune  ?  "  The  stinf?  of  some  such  moralist  is  often 
more  effective  than  the  stern,  cold,  severe  lesson  of 
the  banker  !  Let  him  discourage  bubble  companies, 
refuse  credit,  and  reject  discounts  to  those  who  are 
diverting  hard-earned,  honestly-acquired  money,  from 
true  enterprises  to  atrocious,  wicked,  and  wasteful 
speculations.  Walk  through  Lombard  or  Thread- 
needle  Streets,  wade  througli  Cornhill,  or  loiter  in 
Lothbury  on  the  great  "  Settling-days,"  and  it  is  im- 


92  LONDON   BANKING  LIFE. 

possible  to  avoid  the  reflection  that  times  have 
changed,  that  the  old  things  have  passed  away,  and 
new  habits  have  come  over  the  lives  of  citizens !  It 
is  Tattenham  Corner — not  the  Exchange  of  merchants 
— Tattersall's  instead  of  the  Halls  of  Commerce. 
There  are  no  longer  students  of  finance,  but  keen 
"  bookmakers,  "  those  who  ''hedge,"  "carry  over," 
and  affect  the  "  smartness  "  of  members  of  the  "  ring  " 
rather  than  the  sober  practices  of  gentlemen,  or  the 
grave,  thoughtful  calculations  of  the  true  merchant.* 
"  Speculations  "  in  trade  are,  of  course,  as  vicious 
as  any  other  class  of  misdeeds  which  end  in  bank- 
ruptcy. It  is  often  argued  that  the  tendency  of  the 
age  is  "  for  the  rich  to  become  richer  and  the  poor 
poorer,"  which  is  true  in  many  cases,  and  certainly 
is  more  than  "  half  the  truth"  whenever  great  banks 
lend  themselves  to  bolstering  up  markets,  permitting 
goods  to  be  held  over  from  season  to  season  and 
throughout  periods  when  prices  "greatly  fluctuate.  It 
is  no  secret  that  the  world  has  yet  to  be  informed  of 
many  a  breakdown  of  markets  ;  of  "  Syndicates  " 
parted  company  ;  of  conspiracies  exposed  ;  and  of  the 
"  honor  "  among  a  certain  class  of  dealers  failing  to 
fulfil  their  ordinary  requirements.  Banks  should  be 
no  party  to  such  proceedings,  nor  allow  money  upon 

*"  It  is  true  that  the  credulity  and  cupidity  of  certain  classes  of  the  com- 
munity have  blinded  them  to  the  danger  of  embarking  in  speculations.  They 
appear  to  have  measured  the  value  of  the  promises  held  out  to  them,  not  by 
any  rule  of  experience,  but  by  their  own  sanguine  expectations  ;  and  thus 
they  have  fallen  a  prey  to  those  who,  by  trading  on  their  credulity,  have  ob- 
tained their  money,  and  then  betrayed  their  interests.  The  Secretary  of  the 
Honduras  Legation  "—himself  an  undoubted  authority— "  asserts  that 'the 
fault  of  the  failure  falls  with  equal  force  upon  all  who  have  interests,  rights, 
claims,  complaints,  or  any  participation  whatever  in  these  matters.  It  is  a 
kind  of  "  original  sin,"  which  reaches  even  the  most  innocent  who  have  any- 
thing to  do  with  the  undertaking.'  "—Report  on  Loans  to  Foreign  States. 


STOCK   EXCHANGE  INFLUENCES.  93 

any  sort  of  security  of  doubtful  character.  They 
should  be  suspicious  of  all  combinations,  convinced, 
from  experience,  that  whatever  is  unsound  in  prin- 
ciple cannot  stand  investigation. 

" Extravagance,  luxury, and  self-indulgence"  may 
be  reduced  to  a  compound  phrase,  needing  only  a 
passing  elucidation.  It  is  not  necessary  to  enter  into 
any  moral  disquisitions,  yet  the  private  habits,  dispo- 
sitions, even  the  tastes  of  great  borrowers,  should  be 
followed.  It  will  not  conduce  to  safety  that  those  in 
the  "  thick  of  the  fight "  should  servilely  imitate 
patrician  manners  and  customs,  still  less  that  sump- 
tuous banquets  and  other  meretricious  displays 
should  be  dispensed  as  bribes  for  credit.  It  is  con- 
trary to  City  habits  that  the  "  West-end  "  should  be 
the  parade-ground  which  all  men  must  frequent 
in  order  to  be  known ;  "  club  life  "  the  proper  pass- 
port to  a  bank  parlor  ;  the  "  season  "  recognized  as  the 
only  orthodox  time  for  dinners,  luncheons,  and 
that  then  we  should  "  ape  "  the  tone,  the  dress,  the 
very  accents  of  idle,  dawdling  dandies  who  aifect 
superiority ;  themselves  the  toadies  of  a  bloated 
plutocracy,  who  "  come  like  shadows,  so  depart." 


94  LONDON  BANKING  LIFE. 


CHAPTER  XII. 

AMERICAN     FAILURES. 

"  In  democracies  men  are  never  stationary.  A  thousand  chances  loaft 
them  to  and  fro,  and  their  life  is  always  the  sport  of  unforeseen  or 
extemporaneous  circumstances.  Thus  they  are  often  obliged  to  do 
things  which  they  have  imperfectly  learned;  to  say  tilings  they  im- 
perfectly understand;  and  o  devote  themselves  to  work  for  which  they 
are  unprepared  by  long  apprenticeship. 

"  In  the  United  States  fortunes  are  lost  and  regained  loithout  difficidty ; 
the  country  being  boundless  and  its  resources  inexhaustible.  The  peo- 
ple have  all  the  wants  and  cravings  of  a  growing  creature ;  and 
whatever  be  their  efforts,  they  are  always  surrounded  by  more  than 
they  can  appropriate.  Boldness  of  enterprise  is  the  foremost  cc»/.se  of 
its  rapid  progress,  its  strength,  and  its  greatness.  Commercial 
business  is  there  like  a  vast  lottery,  by  which  a  small  number  of  men 
continually  lose,  but  the  State  is  always  the  gainer.  Any  bold 
speculation  risks  the  fortune  of  the  speculator,  and  of  cdl  those  icho 
put  their  trust  in  him.  The  Americans,  who  make  a  virtue  of  com- 
mercial temerity,  have  no  right,  in  any  case,  to  brand  with  disgrace 
those  loho  practice  it.  Hence  arises  the  strange  indrdgence  .shoivn  to 
bankrupt.'i  in  the  United  States  ;  their  honor  does  not  suffer  by  sitch 
an  accident.  In  this  respect  the  Americans  differ  from  all  the  com- 
mercial nations  of  our  time,  and  resemble  none  of  them  in  their  posi- 
tion or  their  wants." 

De  Tocqueville. 

The  events  of  1873  in  the  United  States  exercised 
a  potent  influence  throughout  America,  and  have 
naturally  affected  the  subsequent  commerce  of  Eng- 
land. It  was  in  August  of  that  3'ear  the  financial 
panic,  offspring  of  vicious  speculation,  culminated ; 
the  crisis  spread  to  every  important  city  in  Northern 
America ;  some  of  the  greatest  banking  houses  sus- 
pended payment ;  the  Stock  Exchange  of  New  York 
was  closed ;  and  there  was  a  paralysis  of  enterprise, 


AMERICAN   FAILURES. 


95 


of  power,  and  all  action  in  trade.  These  results  con- 
tinued to  be  felt  throughout  1874,  and  a  chronic 
weakness  manifested  itself  in  1875,  which  circum- 
stances have  to  be  remembered  in  the  review  of  com- 
merce or  finance.  The  statistics  of  failures  show  re- 
markable results : — 


Year. 

Number  of 
Failures. 

Amount  of 
Liability. 

1873 

5,183 

£ 
45,699,800 

1874 

5,830 

31,047,800 

1875 

7,740 

40,212,070 

Though  these  figures  exhibit  a  large  increase  in  the 
number  of  failures,  the  average  amount  of  liabilities 
for  each  failure  is  diminishing.  There  is  a  tendency 
for  ordinary  business  to  be  more  than  ever  subject 
to  casualties,  while  great  undertakings  in  banking, 
finance,  or  manufactures,  are,  on  the  whole,  able  to 
protect  themselves  from  sudden  storms  or  contin- 
gencies. Some  curious  calculations  are  indulged  in 
by  those  who  study  commercial  disaster  in  the 
United  States.  By  an  eminent  authority  on  the 
subject,  it  is  asserted  "  the  liabilities  of  the  7,740 
who  failed  in  1875  are,  in  round  numbers,  200 
millions  of  dollars.  Estimating  the  average  yield 
of  failed  estates  to  be  33  1-3  per  cent.,  the  actual 
loss  to  capital  account  by  the  failures  of  the 
year  will  stand  at  about  120  millions  of  dollars. 
This  amount  is  equivalent  to  the  value  of  one-half 
the  cotton  crop,  and  is  more  by  30  per  cent,  than 
the  entire  yield  of  all   the  gold  and  silver  mines 


96  LONDON   BANKING  LIFE. 

of  the  country.  It  is  a  serious  loss  that  individuals 
have  to  bear,  to  be  deducted  from  the  profits  of 
business  or  to  trench  upon  the  accumulation  of  pre- 
vious years.  This  120  millions  of  loss  represents 
a  profit  at  10  per  cent,  on  1,200  millions  of  dollars 
of  business ;  in  other  words,  that  amount  of  busi- 
ness of  the  country  for  the  past  year  has  been  done 
for  nothing,  the  profits  being  absorbed  by  losses. 
This  loss  of  120  millions  of  dollars  is  diffused  over 
many  centres  of  trade,  and  has  been  equally  divided 
between  individual  concerns." 

As  in  most  other  countries,  so  in  the  United  States, 
there  is  a  growing  conviction  that  periods  of  crisis 
afford  opportunities  for  making  money,  the  arrange- 
ments for  time  with  creditors,  or  the  compounding  of 
debts  being  systematized  by  professional  men,  by 
whom  there  is  often  the  greatest  abuse  of  the  law. 
It  is  notorious,  however,  that  "  neither  capacity  nor 
capital,  neither  character  nor  conservatism,  are  im- 
parted by  a  compromise,  and  so  in  six  cases  out  of 
nine  the  same  result  will  follow  in  the  course  of  time. 
Meanwhile  the  trader  who  gets  his  settlement  at 
thirty  or  fifty  cents  can  very  well  afford  to  undersell 
the  solvent  merchant  who  desires  to  pay  one  hundred 
cents  on  the  dollar.  The  entire  trade  of  towns,  es- 
pecially in  the  South,  has  been  demoralized  by  set- 
tlements with  parties  entirely  unworthy  of  confi- 
dence, who,  by  imposing  on  the  good  nature  or  fear 
of  creditors,  are  able  to  tempt  the  local  cash  trade 
for  prices  far  below  what  an  honest  merchant  dare 
accept.  The  result  of  competition  between  them 
will  be  to  impair  the  fortunes  of  the  solvent  man, 


AMERICAN  FALLUBES.  97 

unsettle  the  community,  and  destroy  the  chances  of 
a  profitable  business." 

Eminent  authorities  on  the  trade  of  the  United 
States  in  1875  have  thus  summarized  the  position  of 
affairs. 

"  No  general  expression  will  entirely  photograph  the  condition 
of  business  at  the  close  of  the  year ;  while  depression,  lack  of 
profit,  and  want  of  confidence  prevail  in  many  quarters,  espe- 
cially in  the  eastern  section  of  the  country,  there  has  been  con- 
siderable activity,  a  lars>-e  absorption  of  goods,  and  increased 
purchasing  and  debt  paying  power  in  the  west,  and  portions  of 
the  south.  Apart,  however,  from  this  sectional  improvement, 
the  general  results  of  the  year  have  not  been  satisfactory.  The 
number  of  those  actively  engaged  in  trade  who  have  added  to 
their  surplus  are  exceptionally  few ;  those  who  have  held  their 
own  are  not  numerous,  while  a  larger  number  than  both  of  these 
combined  would  have  to  admit  a  diminution,  if  their  assets 
were  valued  at  realizable  figures.  The  failures  of  the  year  are 
in  many  cases  significant ;  but  they  have  been  confined  to  no 
distinctive  trades  ;  they  bear  a  very  small  proj^ortion  to  the 
number  in  each  branch  of  business;  and  some  circumstances 
are  noticeable,  involving  departure  from  legitimate  business 
principles,  which  would  result,  sooner  or  later,  in  ruin,  even  in 
the  best  of  times.  The  failures  in  many  leading  lines  have 
been  astonishingly  few,  indicating  previous  accumulations  of 
capital,  limited  internal  indebtedness  and  a  sounder  condition 
of  things  generally  than  it  was  supposed  could  exist  after  all 
the  waste  of  war,  excessive  taxation,  a  vastly  increased  cur- 
rency, and  the  necessary  expansion  which  followed.  So  that, 
though  the  year  has  resulted  very  rarely  in  profit,  and  much 
more  frequently  in  loss,  there  is  much  in  its  history  to  encourage 
confidence  in  the  ability  of  the  rank  and  file  of  the  commercial 
community  to  wait  for  better  times."* 

The  most    important    occurrence   in   the   United 
States  throughout  the  year  1875  was  on  the  26th  of 

♦The  valuable  circulars  of  Messrs.  Dunn  and  Co.  have  been  relied  on  for 
these  statistics  and  quotations. 

7 


98  LONDON  BANKING  LIFE. 

August,  when  the  Bank  of  California  stopped  pay- 
ment. The  bank  was  regarded  as  a  "  political  power; " 
it  was  the  fiscal  agent  of  nearly  all  the  mining  cor- 
porations in  the  Pacific  States ;  vast  speculations 
had  been  entered  upon  through  its  means  in  stocks, 
shares  and  real  property,  and  jDerhaps  never  in  the 
history  of  any  country  had  capital  been  more  quickly 
or  remarkably  developed.  It  is  not  wise  to  rely  on 
the  glowing  language  indulged  in  when  the  mind  is 
immediately  affected  by  passing  events,  yet  there 
were  statements  made  in  San  Francisco  at  that  time 
so  remarkable  as  to  be  worth  recording.  One  of  the 
apologists  for  the  failure  asserted  that  "  when  the  full 
history  conies  to  be  written  it  will  be  seen  that 
the  bank  now  stands  upon  a  stronger  and  more  hope- 
ful basis  than  at  any  time  since  its  inception,  or 
the  first  opening  of  its  doors,  with  assets  in  excess  of 
its  liabilities."  Party  feeling  was  however  so  strong 
as  to  bring  the  public  journals  into  the  embroilment, 
some  assailing  the  bank,  and  others  defending  its 
conduct.  The  utmost  excitement  was  shown  by  the 
President,  whose  remarkable  career,  which  had  long 
attracted  attention,  was  now  drawing  to  a  painful 
conclusion.  He  had  been  bold,  adventurous,  and  spec- 
ulative in  all  undertakings.  When  the  failure  oc- 
curred his  mental  excitement  became  extreme.  Accu- 
sations were  indulged  in  against  his  integrity,  and 
grievous  recriminations  passed  between  him  and  his  op- 
ponents. He  was  induced  voluntarily  or  involuntarily, 
to  rush  into  the  water,  avowedly  for  the  purpose  of 
bathing;  but  the  result  was  that  he  sacrificed  his 
life.      There    were    then    renewed  attacks   on  his 


AMERICAN   FAILURES.  99 

memory,  but  defences  came  from  many  friends.  The 
general  opinion,  however,  was  that  the  charges  were 
unjustifiable,  that  he  had  been  "  the  master  spirit  of 
most  enterprises  ;  that  his  career  had  been  distin- 
guished by  sagacious  activity  and  high  public  spirit." 

There  were  two  other  important  failures,  the  Ne- 
vada Bank  and  the  National  Gold  Bank  of  San  Fran- 
cisco, both  illustrating  the  dangers  of  recent  banking 
in  that  part  of  America.  Their  system  was  to  keep 
a  reserve  in  gold,  about  twenty-five  per  cent,  of  the 
deposits ;  but  there  was  no  obligation  to  receive 
"greenbacks  "  at  par,  although  obliged  to  pay  their 
debts  in  coin.  This  was  peculiar  to  the  gold-pro- 
ducing States;  but  not  to  other  parts  of  America. 
The  run  on  the  National  Gold  Bank  was  a  conse- 
quence of  the  failure  of  the  Bank  of  California,  and 
accelerated  by  the  very  provisions  which  provided  for 
its  safety.  This  would  have  been  the  case  with  any 
other  bank,  if  compelled  by  law  to  a  defined  reserve, 
and  is  a  good  illustration  of  the  absurdities  of  leds- 
lative  enactments  on  trade  which  is  always  able  to 
take  care  of  itself  amidst  changes  and  troubles,  far 
better  than  if  subject  to  any  abstract  law  regulating 
its  internal  government.* 

Returning  to  the  remarkable  movements  of  the 
Bank  of  California,  there  was  no  sooner  a  failure  de- 
clared than  resuscitation  commenced.  Daily  intelli- 
gence reached  England  that  the  leading  capitalists 
had  subscribed  4,800,000  dollars  to  enable  it  to  re- 
sume business  ;  the  bank  prepared  to  re-open  during 

*  The  authorities  of  the  United  States  publish  an  important  return  of 
these  "  National  Banks."  Their  number  is  more  than  2000,  and  the  statis- 
tics are  worth  recording.    See  Appendix  C. 


100  LONDON  BANKING  LIFE. 

the  intervening  month,  and  absolutely  resumed 
business  on  the  4th  of  October.  Since  then  the  bank 
has  successfully  followed  the  regular  course  of  busi- 
ness, and  it  may  be  presumed  was  never  better  able 
to  control  and  regulate  the  important  transactions 
intrusted  to  its  management.  The  experience  which 
results  from  such  a  temporary  stoppage,  is  of  great 
value  to  those  engaged  in  the  administration  of  af- 
fairs. They  know  the  "  shoals  and  quicksands  "  to 
avoid ;  the  customers  of  dangerous  adventures  ;  those 
of  too  ardent  a  temperament ;  and  others  of  deep  de- 
signing character,  who  are  best  understood  when 
once  their  plans  are  allowed  to  be  developed.  It  is 
now  an  amusing  and  instructive  lesson  to  follow  some 
of  the  early  traders  of  this  remarkable  city.  There 
was  a  firm  so  cautious,  that  they  never  owned  a  dol- 
lar of  stock  in  a  mine  ;  never  had  a  branch  house  ; 
never  sent  out  a  "  drummer  "  to  get  business ;  and 
never  sued  a  man  for  debt.  In  politics  they  did  not 
sell  their  principles,  and  when  a  Pacific  Railroad  was 
still  a  dream  of  the  future,  they  were  among  the  fore- 
most to  urge  forward  the  undertaking.  Immense 
difficulties  were  encountered,  such  as  the  fluctuations 
of  Government  Bonds,  the  variations  in  the  price  of 
materials,  and  the  absorption  of  money ;  yet  the 
"  good  faith  to  build  a  railroad  "  carried  them  and 
their  colleagues  to  a  successful  result.  So  it  has  been 
with  most  enterprises  in  young  countries  ;  and,  while 
often  swamped  by  speculators,  the  "  good  and  true 
men  "  in  the  new  cities  of  the  far  west  ever  follow 
the  law  of  progress. 

While  the  reorganization  of  the  great  bank  was  go- 


AMERICAN   FAILURES.  101 

ing  forward,  rumors  were  circulated  as  to  other  banks ; 
but  on  the  11th  of  September  it  was  reported : — 

"  Commercial  circles  are  beginning  to  assume  a  cheerful 
phase.  The  clouds  are  passing  over,  dispelled  by  the  light  of 
reason.  No  mercantile  failure  has  occurred  during  a  fortnight, 
not  a  single  mechanical  or  manufacturing  establishment  of  any- 
kind  has  been  compelled  to  close  its  doors  or  to  suspend  busi- 
ness. It  is  true  that  by  reason  of  the  suspension  of  three  banks, 
out  of  perhaps  a  score  of  banking  houses,  large  sums  of  active 
capital  have  for  the  time  being  been  locked  up  and  withdrawn 
from  circulation.  Yet  there  have  been  no  failures  among  mer- 
chants, mechanics,  or  stock  brokers.  This  shows  a  degree  of 
financial  strength  greater  than  had  been  claimed,  and  proves 
the  value  of  a  sound  currency  ;  that  wealth  is  not  builded  upon 
a  false  irredeemable  paper  currency.  The  Merchants'  Exchange 
Bank  resumed  specie  payments  a  week  since,  and  has  since  de- 
clared its  regular  monthly  dividend  of  one  per  cent.  There  is 
yet  a  good  deal  of  coin  locked  up  in  private  vaults,  waiting  for 
a  general  resumption  on  the  part  of  the  several  stock  boards; 
the  general  every  day  business  of  the  city  seems  to  equal  the 
full  average  for  the  season.  Wholesale  jobbers  find  no  reason 
to  complain,  nor  do  the  large  fancy  dry  goods  establishments 
exhibit  any  signs  of  distress."* 

All  travellers  able  to  understand  the  Western 
States  of  America,  report  that  San  Francisco  con- 
tinues an  astonishing  place,  seeing  that  it  came  into 
existence  with  the  discovery  of  gold  in  California 
only  thirty  years  since.  It  is  remarkably  well  placed 
for  business,  within  a  perfectly  land-locked  harbor 
many  miles  in  length,  and  some  six  or  seven  miles 
across.  An  immense  work  has  been  done  in  the  erec- 
tion of  buildings  ;  but  wood  and  iron  are  used,  as  in 
all  American  cities,  to  an  extent  that  fully  accounts 
for  the  sweeping  character  of  the  great  fires  that  oc- 

•  The  San  Francisco  ^ezos  Letter,  llth  of  September,  1875. 


102 


LONDON   BANKING  LIFE. 


casionally  occur.  The  climate  resembles  very  much 
that  of  Australia  ;  its  products  are  somewhat  similar, 
and  there  is  no  cold  worth  mentioning,  even  in  the 
wet  season. 

The  mines  of  California  are  improving,  as  is  shown 
from  the  statistics  of  the  gold  and  silver  returns  for 
the  year  1875,  yielding  a  value  of  about  £16,000,- 
000  sterling.  The  consequence  of  this  remarkable 
progress  has  been  to  draw  to  the  place  emigrants 
from  all  nations,  the  Germans  and  Chinese  being  in 
great  numbers, — there  are  some  from  Japan,  while 
other  Eastern  races  are  not  absent.  As  the  epoch 
just  passed  through  will  become  a  subject  of  promi- 
nent importance,  it  is  desirable  to  record  some  general 
statistics  of  American  progress : — 

Statement  showing  the  d'wision  of  the  precious^  metals  produced  in  the 

States  and  Territories  ivest  of  the  Missouri  River  during  1875. 


States  and  Territories. 

Gold  Dust. 

Silver  Bullion. 

Total. 

California 

Nevada 

Ofeoi'on 

16,326,211 

216.543 

1,16.5,046 

81,932 
1,280,067 
2,735,609 

48,154 

23,500 
2,627,444 

68,117 
1,776,953 

s 

1,426,940 
40,261,826 

274,835 

838,000 

5,639,440 

85,593 

3,672,373 

2,340,554 

$ 

17,753,151 

40.478,369 

1,165,046 

81,932 

1,554,902 

Washington 

Idaho 

Montana   

3,573,609 

5,687,494 

10  ,093 

Utah 

Arizona 

Colorado 

Mexico 

British  Columbia.  . 

6,299,817 
2,408,671 
1,776,953 

Total $ 

26,-349,476 

54,539,.561 

80.889.037 

Returns  of  preceding  years  of  the  same  precious  metal s  : — 


1871. 

1872. 


$58,284,029 
62,236,913 


1875 $80,889,037 


1873....  $72,258,693 
1874....   74,401,055 


AMERICAN  FAILURES. 


103 


The  trade  between  California  and  Australia  has 
lately  been  placed  in  an  improved  position  through 
the  establishment  of  a  new  line  of  steamers  by  the 
New  South  Wales  and  New  Zealand  Governments. 
The  following  statistics,  therefore,  may  be  valuable 
for  future  reference  : — 

Exports  from  America  to  the  Australian  Colonies  for  the  past 

twenty  years. 


Year. 

Amount. 

Year. 

Amount. 

Year. 

Amount. 

% 

^ 

f 

1856 

1,123,400 

1863 

487,700 

1870 

166,000 

1857 

314,600 

1864 

579,700 

1871 

200,500 

1858 

380,100 

1865 

501,900 

1872 

292,800 

1859 

730,400 

1866 

2,164,800 

1873 

304,200 

1860 

874,700 

1867 

28,300 

1874 

382.600 

1861 

1,056,400 

1868 

838,000 

1875 

399,100 

1862 

332,300 

1869 

374,500 

From  1856  to 
From  1866  to 


1865   iuclusive. 
1875   inclusive . 


S6,38 1,200 
5,150,700 


Total $11,532,000 


Direct  Exports  from  San  Francisco  to  the  Colonies  in  1875. 


INlonlh. 


Australia. 


January 

February. .  . . 

March 

April 

May 

June 

July 

August 

September. . . 

October 

November.    . 
December . . . 

Total. . 


22,600 
40,100 
33,700 
13,500 
22,900 
21,000 
64,400 
44,600 
16,700 
18,500 
45,800 
52,300 


New  Zealand, 


399,100 


7,400 

4,100 

5.300 

2.600 

2,700 

300 

22,800 

10,700 

5,300 

5,900 

4,600 

7,400 


79,100 


104  LONDON   BANKING   LIFE. 


CHAPTER  Xm. 

CANADIAN  AFFAIRS. 

"  We  are  now  on  the  frontier  of  civilization.  To  cross  almost  impene- 
trable forests  ;  to  swim  deep  rivers ;  to  encounter  pestilential  marshes ; 
to  sleep  exposed  to  the  damp  air  of  the  rooods : — are  efforts  which  a 
Canadiaii  easily  conceives,  if  a  dollar  is  to  be  gained. 

"  Civilized  man  clears  the  ground  of  its  remains.  In  the  solitude  of 
America,  all-powerful  nature  is  the  only  instrument  of  ruin,  as  well 
as  of  reproduction.  Here  and  in  the  forest  over  which  man  iviles, 
death  strikes  continually ;  but  there  is  none  to  clear  away  the 
remains. 

"  The  perfect  repose  of  natwe  is  as  striking  in  the  wilderness  as  on  the 
ocean.  WJien  at  noon-day  the  sun's  rays  penetrate  the  forest,  tJiere 
is  often  heard  a  long  sob,  a  kind  of  plaintive  cry  echoing  in  the  dis- 
tance. It  is  the  last  breath  of  the  expiring  breeze.  Deep  silence 
ensues,  and  such  absolute  stillness  as  Jills  the  mind  with  a  kind  of 
superstitious  awe. 

"  At  sea  the  voyager  xcatches  the  horizon  on  which  he  is  steering.  His 
view  is  bounded  only  by  the  poioers  of  the  human  eye.  But  what  is 
there  to  indicate  a  j^ath  across  the  leafy  ocean?  Ini-ain  man  may 
climb  the  lofty  trees ;  others  still  higher  loill  surround  him.  Every- 
where the  forest  folloios  him,  the  forest  which  extends  to  the  Arctic 

Pole,  and  to  the  Pacific  Ocean." 

De  Tocqueville. 

The  Dominion  of  Canada  has,  in  proportion  to  its 
trade  and  resources,  experienced  a  corresponding^  de- 
pression to  that  of  the  United  States.  The  statistics 
for  1873  and  1874  would,  if  procurable,  show  a  serious 
list  of  disasters;  but  1875  furnishes  1970  failures 
with  an  amount  of  ,£28,883,611  of  liabilities. 

The  vast  territories  of  Canada  are  not  calculated 


CANADIAN  AFFAIRS.  105 

to  develope  great  prosperity ;  the  seasons  being  ill- 
adapted  to  steady,  continuous  labor  in  forest  or  in 
field  ;  nor  is  there  a  population  large  enough  to  sus- 
tain great  enterprises.  Yet  the  last  few  years  have 
shown  much  overtrading,  especially  in  imported 
goods.  The  government  expenditure  has  not  at  all 
times  been  either  wise  or  expedient,  while  the  rail- 
way enterprises  have  absorbed  capital  without  yield- 
ing profitable  results.  It  must,  however,  be 
remembered  that  the  Canadas  present  no  homogene- 
ous race,  the  differences  being  as  great  as  in  the 
United  States.  There  is,  of  course,  the  grand  sub- 
stratum of  French  and  English  people ;  but  the 
clearances  of  the  Scotch  moors,  of  the  western  High- 
lands, and  of  the  waste  lands  of  Ireland  have  brought 
together  a  very  mixed  population  with  great  diver- 
sity of  language,  manners,  and  religion.  The  Gov- 
ernment has  had  its  times  of  trial  and  affliction,  not 
the  least  being  those  connected  with  the  neighboring 
States,  which  have  often  provoked  aggressive  move- 
ments, endangered  the  Colonial  institutions,  and  ar- 
rested the  progress  of  local  improvements.  There 
has,  since  the  Confederation,  been  strength  and 
cohesion  which  augurs  great  things  for  the  future, 
and  it  may  well  be  believed  that  a  ncAV  and  prosper- 
ous era  has  been  commenced.  The  admirable  bank- 
ing system  has,  moreover,  generally  maintained  the 
Dominion  in  a  sound  financial  condition.  It  is,  there- 
fore, important  to  show  the  resources  of  the  various 
Banks,  which,  with  one  exception,  are  entirely  of 
local  origin,  and  in  nearly  all  cases  dependent  on 
local  support. 


106 


LONDON  BANKING  LIFE. 


CANADIAN  BANK  RETUENS 


LIABILITIES. 


Banks. 

Circula- 
tion. 

Govern- 
ment 
Deposits. 

Other 
Deposits. 

Other 
Liabili- 
ties. 

Total. 

Ontario. 

$ 

$ 

$ 

$ 

$ 

Bank  of  Toronto  .... 

932,503 

197,295 

2,221,080 

118,950 

3,469,8^8 

Bank  of  Hamilton    .    .    . 

461,896 

92,333 

603,755 

9,041 

1,167,025 

Canadian  B'kof  Commerce 

6,902,247 

368,439 

6,599,510 

176,621 

14,046,817 

Dominion  Bank    .... 

813,061 

50,000 

1,802,361 

104,845 

2.770,267 

Ontario  Bank 

924,232 

918,059 

2,412,169 

165,808 

4,420,268 

Royal  Canadian  Bank  .    . 

972,990 

340,808 

1,423,126 

214,575 

2,951,499 

St.  Lawrence  Bank  .    .    . 

442,120 

82,694 

321,322 

8,584 

851,720 

Federal  Bank 

522,738 

189,300 

737.167 

3,593 

1,452,798 

Bank  of  Ottawa    .    .    .    . 

122,384 

25,303 

170,165 

,    , 

317,852 

Imperial  Bank  of  Canada. 

347,968 

84,813 

821,842 

9,354 

1,263,977 

Quebec. 

Bank  of  Montreal.    .    .    . 

3,513,550 

4,181,472 

10,240,547 

534,709 

18,470,278 

Bank    of   British   North 
America 

1,377,574 

65,385 

6,029,343 

97,313 

7,569,615 

Banque  du  Peuple    ,    .    . 

214,635 

132,907 

867,223 

20,242 

1,235,067 

Banque  Nationale     .    .    . 

681,510 

257,427 

1,306,943 

89,167 

2,335,047 

Banque  Jacques  Cartier  . 

31,358 

808,873 

531,361 

653,986 

2,025,578 

Banque  Ville-Marie .    .    . 

130,324 

62,369 

368,749 

44,509 

605,951 

Banque  de  St.  Jean  .    .    , 

95,830 

45,350 

71,048 

11,300 

223,528 

Baiique  de  St.  Hyaciuthe  . 

80,841 

28,485 

219,474 

,  . 

328,800 

Banque  de  Hochelaga  .    . 

234,201 

50,900 

147,368 

432,469 

City  Bank 

319,423 

337,168 

1,632,541 

132,610 

2,421,742 

E.  Townships  Bank  ,    .    . 

455,365 

393,007 

616,269 

14,610 

1,479,251 

Exchange  Bank    .... 

397,105 

35,050 

663,342 

37,442 

1,132,939 

Molson's  Bank 

1,066,607 

310,202 

2,301,742 

131,236 

3,809,787 

Merchants'  Bank .... 

3,457,330 

207,640 

7,701,391 

858,622 

12,224,983 

Metropolitan  Bank  .    .    . 

45,347 

64,779 

148,923 

.  . 

259,019 

Quebec  Bank    

586,385 

321,399 

2,890,242 

195,913 

3,993,939 

Union  B'k  of  Lower  Canada 

477,770 

298,122 

1,379,848 

199,961 

2,355,701 

Stadacona  Bank   .... 

187,992 

25,000 

195,861 

•    • 

408,853 

Total $ 

25,795,286 

9,704,639 

54,424,712 

3,832,991 

14,027,628 

CANADIAN  AFrAIES. 


107 


TO  SOxn  DECEMBER,  1875. 


ASSETS. 


Specie. 

Dominion 

Kotes,  &c. 

Loans. 

Bank 

Premises. 

Other 

Assets. 

Total. 

$ 

$ 

$ 

$ 

$ 

$ 

205,919 

900,624 

614,634 

50,000 

4,884,043 

6,004,220 

71.457 

216,300 

311,032 

1,220,149 

1,818,998 

898,284 

2,005,822 

1,132,161 

216,354 

13,034,009 

17,346,690 

141,389 

080,001 

240,851 

30,074 

3,895,613 

4,993,928 

169,908 

1,009,203 

364,150 

172,734 

6,283,105 

7,999,280 

139,734 

494,799 

818,490 

68,289 

3,494,002 

5,015,314 

29,115 

142,317 

59,928 

1.177,620 

1.408,980 

71,651 

332,728 

109,235 

44,395 

1,610,131 

2.108,140 

15,145 

112,344 

1,000 

4,825 

507,974 

701,288 

53,409 

444,802 

92,000 

61,678 

1,291,762 

1,^3,711 

1,793,992 

7,833,282 

2,130,187 

425,000 

24,730,117 

36,918,578 

824,998 

2,000,524 

198,210 

200,000 

9,022,902 

12,846,640 

76,912 

453,539 

81,950 

35,000 

2,471,R9C 

3,119.297 

56,044 

044,211 

193,600 

52,215 

3,786,016 

4,732,086 

,  , 

232,01)4 

419,202 

113,019 

3,140,891 

3,911,116 

967 

91,027 

11,800 

38,400 

1,274,373 

1,417,167 

5,576 

05,389 

,    , 

14,801 

371.107 

456,873 

3,376 

92,485 

,    , 

400,992 

550,8,53 

2,975 

160,938 

18,250 

836,719 

1,018,882 

44,216 

405,191 

,    , 

129,138 

3,.533.112 

4,111,657 

72,103 

353,868 

224,564 

59,982 

2,315,9.'J9 

3,026,4.56 

25,026 

264,059 

183,421 

114,070 

1,616,405 

2,203,641 

186,878 

667.096 

184,420 

156,143 

5,227,080 

6,421,617 

1,156,498 

2,981,005 

787.009 

655,006 

16,812,5-6 

22,392,974 

13,831 

106,122 

429,627 

44,901 

460.590 

1,055,071 

122,426 

628,658 

477,666 

70,502 

5,773,.594 

7,072,906 

170.656 

313,157 

19.646 

108,5K9 

4.227.918 

4,839,966 

21,288 

104,395 

143,175 

3,938 

1,138,381 

1,411,177 

6,373,833 

24,412,270 

9,252,214 

2,870,013 

124,605,170 

167,573,506 

108  LONDON  BANKING  LIFE. 

Although  the  first  eight  years  of  Confederation, 
closing  in  the  July  of  1875,  enjoyed  uninterrupted 
prosperity,  the  balance  of  revenue  over  expenditure 
in  that  interval  amounted  to  nearly  X 3,000,000,  the 
surplus  for  the  year  1875  has  now  been  ascertained 
to  be  only  .£1,000,000.  The  finance  minister  antici- 
pates, however,  that  owing  to  the  universal  prostra- 
tion of  trade  on  the  American  continent,  there  will, 
during  the  current  year,  be  an  important  reduction 
in  the  value  of  imports,  causing  so  serious  a  decline 
in  the  customs  revenue  as  to  convert  the  traditional 
surplus  into  a  deficit.  Instead  of  yielding  to  the 
pressure  of  the  manufacturing  and  other  interests  de- 
manding increased  or  retaliatory  customs  duties,  the 
government  have  wisely  looked  to  maintaining  the 
equilibrium  by  a  sweeping  reduction  in  ordinary  ex- 
penditure, and  their  estimates  for  the  current  year, 
accordingly,  show  a  diminution  of  no  less  than 
.£2,500,000.  This  course  is  the  more  creditable 
since,  while  in  England  the  largely  increasing  returns 
from  stamp  duties  may  be  relied  on  in  times  of  com- 
mercial depression  to  supplement  any  falling  off  in 
other  sources  of  revenue,  there  are  in  Canada,  neither 
accumulated  fortunes  nor  that  concentration  of  loan- 
able capital  from  the  incidence  of  which  the  English 
Exchequer  derives  so  steady  an  income.  Canada,  in 
fact,  depends  almost  exclusively  on  customs,  public 
works,  and  excise.  As  regards  the  last,  she  labors 
under  the  disadvantage  of  having  to  assimilate  her 
imposts  to  those  of  the  United  States.  If  the 
Canadian  excise  on  beer  or  spirits  be  much 
in   excess   of  the   United   States,  the    articles   will 


CANADIAN  AFFAIRS.  109 

be  produced  there.  So  with  her  costly  public 
works,  the  tolls  of  which  must  be  regulated  by  those 
on  the  United  States'  outlets  to  the  ocean.  It  is  a 
good  omen  that  under  these  circumstances  the  gov- 
ernment should  both  resist  the  strong  popular  demaijd 
in  favor  of  increased  import  duties  as  well  as  over- 
come the  natural  reluctance  to  a  self-imposed  economy. 

In  addition  to  the  strength  thus  shown  in  banking 
institutions,  the  deposits  of  Savings  Banks  in  1875 
amounted  to  nearly  X4,000,000,  a  large  proportion  of 
which  was  represented  by  sound,  convertible  assets, 
and  the  remainder  held  in  gold  as  a  reserve  available 
for  the  sudden  demands. 

There  has  been  an  interval  of  repose  lately  in  Ca- 
nadian affairs  which  is  believed,  by  those  of  practical 
experience  and  competent  to  decide,  to  be  only  a 
passing  storm,  or  a  temporary  check  to  prosperity. 
Yet  it  allows  a  calm  review  of  the  trade,  the  inter- 
nal resources,  and  the  general  policy  of  the  last  eight 
years.  Within  that  period  the  Confederate  Govern- 
ment has  had  the  management  of  the  colonies,  which 
previously  were  separate,  often  with  divided  inter- 
ests, or  working  upon  different,  if  not  opposing  prin- 
ciples. The  first  year  of  the  Dominion  was  1868, 
when  the  aggregate  trade  amounted  to  £27,000,000. 
It  continued  to  increase  until  1873,  when  it  reached 
X44,500,000.  During  the  last  two  years  a  decrease 
of  power  has  been  manifested,  traceable  to  the  ex- 
traordinary depression  of  trade  in  the  United  States, 
which  has  reacted  upon  Canada.  A  prohibitory  tariff 
having  for  its  object  the  encouragement  of  native 
manufactures  is  thought  vitally  and  essentially  ad- 


110  LONDON   BANKING   LIFE. 

verse  to  the  expanding  commerce  of  free  countries. 
Besides  these  points,  there  has  been  over  trading, 
which  time  must  be  allowed  to  control,  and  to  permit 
of  those  recuperative  measures  required  in  all  com- 
mercial undertakings. 

Concurrently  with  prosperity  throughout  the  Do- 
minion there  was  a  continuous  progress  in  the  gov- 
ernment revenues.  They  have  steadily  advanced 
from  X 2,800,000  in  1868  to  X5,000,000  in  187-4;  but 
in  1875  the  figures  are  for  the  revenue  <£5,050,000, 
expenditure  £4,850,000,  showing  a  surplus  of  X200,- 
000  notwithstanding  the  reduction  of  the  customs 
receipts,  and  the  erroneous  policy  of  the  protection- 
ists in  the  legislature.  This  is  the  more  to  be  la- 
mented, as  the  Canadians  have  before  them  in  the 
United  States  the  visible  evidence  of  retrogression 
from  the  same  errors,  while,  if  the  measures  of  the 
present  government  are  adopted,  there  will  be  little 
else  required  than  a  moderate  reduction  of  expendi- 
ture, a  more  liberal  tariff,  and  a  firm  belief  in  the 
future,  placing  the  country  in  a  position  to  deal  with 
a  lower  basis  of  prices,  and  a  return  of  prosperity 
when  prudence,  sagacity  and  sound  enterprise  are 
again  manifested. 

It  is  necessary  in  all  new  countries  to  watch,  not 
only  the  extent  of  the  public  debt,  but  the  objects  for 
which  it  is  incurred.  The  total  debt,  then,  of  the 
Dominion  is  about  £25,500,000,  and  the  money  has 
been  raised  for  legitimate  objects  of  public  utility, 
such  as  canals,  railways,  roads,  harbors,  lighthouses, 
and  river  improvements.  In  an  official  document  it 
is  admitted  that,  though  many  of  the  public  works 


CANADIAN   AFFAIRS.  Ill 

have  so  far  yielded  but  a  small  revenue  in  comparison 
with  the  interest  on  their  cost,  much  of  the  expendi- 
ture has  been  regarded  both  by  the  Imperial  and 
Dominion  governments  as  necessary,  not  in  the  in- 
terest of  Canada  exclusively,  but  also  on  national 
grounds,  so  much  so  that  the  Imperial  parliament  has, 
at  various  times,  sanctioned  guarantees  in  aid  of  their 
construction  to  the  extent  of  £8,400,000.  The  en- 
gagements of  Canada  in  connection  with  all  these 
guarantees  have  been  punctually  met  without  any 
advance  whatever,  from  the  Imperial  treasury.  There 
is  a  sinking  fund  of  X  1,000.000  established  which  is 
working  fairly,  while  the  interest,  once  at  6  per  cent., 
is  being  brought  to  4  per  cent,  per  annum,  the  whole 
annual  charge  being  not  more  than  .£1,300,000,  or 
about  Qs.  Sd.  per  head  of  the  population. 

The  adverse  events  of  the  last  two  years  in  the 
commercial  world  will  produce  heavy  results  on  these 
young  settlements.  Yet  new  life  has  been  given  by 
consolidation  of  political  power  ;  and  there  has  been 
unparalleled  progress  in  trade,  in  shipping,  and  in 
public  works.  So  it  is  equally  certain  that  a  wise 
and  prudent  system  of  taxation  will  stimulate  further 
activity,  giving  material  assistance  to  the  country, 
which  is  not  the  most  favored  in  America,  seeing  that 
it  has  to  contend  against  climate,  limited  resources 
and  a  necessarily  scanty  population. 


112  LONDON   BANKING   LIFE. 


CHAPTER  XIV. 

AUSTRALIAN  TRADE  AND  FINANCE. 

"It  is  an  interesting  study  to  watch  the  progress  of  colonies,  to  mark 
their  vicissitudes,  and  record  their  struggles  against  natural  or 
artificial  obstacles.  There  are  lessons  loorth  deducing  from  changes 
inevitably  associated  ivith  neio  settlements;  and  it  may  he  that  the 
principles  both  in  trade  and  politics  can  be  folloived  loith  greater 
accuracy  when  applied  to  small  and  rising  communities  than  in  old 
and  settled  countries.  If  modern  colonization,  ivith  its  important 
tendencies,  its  rapid  progress,  and  astonishing  residts  are  trxdy 
appreciated,  much  will  be  done  towards  understanding  a  subject 
ivhich  by  future  generations  will  be  deemed  one  of  the  inost  important 
of  the  present  century ,  from  the  great  revolution  it  has  effected  in  the 
social  and  political  position  of  society.  This  vnll  be  acknowledged 
when  the  events  are  made  matters  of  history ;  as  contemporaneous 
facts  will  then  have  ceased  to  be  novelties.  An  age,  like  an  epic 
poem,  has  to  be  viewed  as  a  ivhole  before  it  can  be  jitdged  rightly ; 
and  so  icith  the  great  tide  of  emigration  and  the  gold  discoveries — 
their  results  both  in  England  and  Australia  have  yet  to  be  determined, 
although  .10  far  as  their  consequences  are  known,  the  endeavor  must 
be  continually  made  in  a  fair  and  comprehensive  spirit,  to  trace  their 
history,  and  to  arrive  at  such  opinions  about  thefuture  as  reason  and 
argument  will  warrant." 

Anon. 

There  is  the  true  ring  of  English  life  in  declaring 
that  Australia  is  an  atrsrresration  of  "  free  states  with 
free  banks."  Such  liberty  has  been  well  exemplified 
in  the  thorough  elasticity  of  the  trade  and  finance  of 
the  great  island  continent.  Since  the  terrible  conse- 
quence of  the  drought  which  followed  three  adverse 


AUSTRALIAN   TRADE   AND    FINANCE.  113 

seasons,  there  has  been  a  steady  and  continuous  im- 
provement in  all  affairs ;  the  various  interests  have 
been  better  understood  than  previously  ;  while  for 
the  most  part  there  have  been  prudence  and  fore- 
thought among  those  instructed  with  the  administra- 
tion of  credit.  Australia  has,  at  present,  been  the 
gainer  from  the  decline  in  the  value  of  manufactures. 
Elsewhere  traders  have  failed  in  numbers  and  for 
great  amounts ;  but  Australia  has  not  had  many 
cases  of  insolvency,  and  those  which  have  occurred 
have  with  one  exception  been  for  comparatively 
small  figures.  This  may  be  traced  to  the  staple  pro- 
ducts being  limited  in  variety  and  among  the  prime 
necessaries  of  life.  There  is,  moreover,  only  a  partial 
development  of  the  country  beyond  the  ''seaboard," 
hence  the  area  of  production  is  open  to  extension, 
and  there  is  always  the  prospect  of  a  decline  of  prices 
in  the  main  exports  being  compensated  for  by  an  in- 
creased quantity,  although  even  this  may  become  a 
prospective  danger  if  too  lai-gely  relied  on  by  the 
producers. 

As  the  importing  classes  have  become  more  gener- 
ally familiar  with  their  special  duties,  there  has  not 
been  anything  like  the  financial  troubles  of  the  spec- 
ulative season  which  followed  the  gold  discoveries. 
The  clu-onic  condition,  indeed,  is  that  of  glutted 
markets,  but  the  burden  of  finance  is  among  London 
capitalists  content  to  give  long  credit  to  representa- 
tives of  storekeepers.  It  may  be  that  stocks  are 
almost  as  heavy  in  Sydney,  Melbourne,  or  even  Ade- 
laide houses,  as  in  Manchester,  Bradford,  or  London  ; 
but  there  is  an  ever  enlarging   consumption  ;    the 


114 


LONDON   BANKING   LIFE. 


trade  is  followed  through  recurring  seasons,  and 
steam  communication  and  telegraphy  enable  it  to 
be  well  organized  and  placed  on  a  generally  sound 
foundation.  The  stream  of  emigration  has  of  late 
years  caused  the  manufacturing  element  to  be  intro- 
duced into  the  great  Australian  cities  ;  which,  in  the 
case  of  female  and  child  labor,  especially  when  em- 
ployed on  machines  for  sewing  or  other  handicraft, 
may  rapidly  assume  importance.  Already  dangerous 
Symptoms  have  been  manifested,  giving  forewarnings 
of  "protection  to  home  industries,"  the  result  of 
which  have  to  be  followed  in  tariffs  that  only  reflect 
credit  on  those  who  have  been  educated  in  the  school 
of  Cobden  or  know  how  to  appreciate  the  legislation 
of  Peel. 

As  it  is  long  since  any  careful  review  of  Australian 
banking  was  made,  it  may  be  important  to  record  the 
mighty  progress  that  has  been  going  forward,  recol- 
lecting that  the  statistics  only  embrace  the  three  colo- 
nies of  New  South  Wales,  Victoria,  and  South 
Australia.  The  other  colonies  are  omitted  from  the 
comparison  from  the  fact  that  their  growth  has  been 
almost  entirely  of  a  subsequent  date,  qy  from  the  fact 
that  there  has  not  been  the  information  published 
for  public  guidance. 

NEW  SOUTH  WALES. 


Liabilities. 

Assets. 

Year. 

Deposits. 

Circu- 
lation. 

Toial. 

Coin. 

other 

Assets. 

Total. 

1860 
1875 

£ 
5,313,944 

13,650,892 

950,967 
1,114,411 

£ 

6,654,355 

15,056,485 

£ 
1,626,993 
2,317,600 

£ 

7,895,513 

16,509,302 

£ 

9,522,506 

18,826,902 

AUSTRALIAN   TEADE   AND   FINANCE. 


115 


VICTORIA. 


Liabilities. 

Assets. 

Year. 

Deposits. 

Circu- 
lation. 

Total. 

1 

Coin. 

Other 

Assets. 

Total. 

1860 
1875 

£ 

7,043,345 

13,734,948 

£ 
1,905,843 
1,382,612 

£ 

9,188,371 
15,483,172 

£ 
2,649,909 
2,660,087 

£ 
10,014,154 
19,619,395 

£ 
12,564,063 
22,279,482 

SOUTH  AUSTRALIA. 


Liabilities. 

Assets. 

Year. 

Deposits. 

Circu- 
lation. 

Total. 

Coin. 

Other 

Assets. 

Total. 

1860 
1875 

£ 

•    689,984 
2,-504,694 

£ 

248,187 
403,038 

£ 
971,820 
3,034,442 

£ 

272,588 
471,127 

£ 

1,315,372 
4,493,170 

£ 
1,587,960 
4,934,297 

With  such  evidences  of  progressive  wealth,  the 
proceedings  and  policy  of  governments  must  have  an 
influence.  Allowing  for  that,  it  is  important  to  di- 
vide the  colonies  into  their  respective  parts,  and  to 
remember  that  each  bank  is  bound  by  local  enact- 
ments to  publish  quarterly  average  returns  of  all  im- 
portant operations ;  but  there  is  little  else  to  control 
freedom  of  action,  or  to  place  bounds  on  their  opera- 
tions. There  have  been  attempts  made  to  control 
the  prerogative  of  liberty  ;  but  happily  not  even  the 
most  rampant  democratic  assembly  has  ventured  on 
legislative  enactments  for  the  future.  The  follow- 
ing are  the  statistics  to  the  31st  of  December, 
1875:— 


116 


LONDON   BANKING   LIFE. 


NEW  SOUTH  WALES. 


Assets. 


Bajiks. 

Coin  and 
Bullion. 

Bank 
Premises. 

Acciiiints 

withoth'r 

Banks. 

Debts  to 
Bank. 

Total. 

New  South  Wales 
CommerciMl 

£ 

1,017,384 

495,305 

108,353 

85,328 

310,738 
46,716 

50,026 
136,756 
116,195 

55,744 

£ 
04,442 
64,781 
40,286 
16,000 

53,041 
20,000 

23,687 
26,246 
21,750 

£ 

9,486 

22,848 

2,33-1 

593 

14,715 
746 

472 

2,298 
1,171 

182 

£ 

2,527,276 
417,373 

£ 
6,796,523 
4,634,998 
872  351 

Union 

390,185 
1,680 

2,258 

131,190 

52,864 

12,743 

395,398 

2,383,011 
345,561 

509.839 
1,131,812 
1,055,544 

702,765 

Australian     Joint 
Stock 

London  Chartered 

English,    Scottish, 

and  Australian 

Oriental    

City 

Mercantil       Bank 
of  Sydney 

Total 

£2,422,545 

330.233 

54,842 

3,535,569 

18.826.902 

LlABILTTIES. 


Banks. 

Circu- 
lation. 

Accept- 
ances. 

Deposits. 

Other 
liabil- 
ities. 

Total. 

New  South  Wales 

Commercial 

Au.stralasia 

Union 

Australian     Joint 
Stock 

£ 

368,411 

345,868 

51,303 

16,513 

192,014 
7,513 

27,878 
46,737 
51,608 

6,565 

£ 
3,276 
6,344 
7,013 
6,308 

9,769 
353 

2,144 

1,738 

63 

£ 

4,887,624 

3,338,346 

727,089 

552,347 

1,579,856 
228,399 

334,704 
775,3.34 
732,460 

494,732 

£ 

84,352 
36,830 

10,583 
39 

278 

110,708 

11,343 

45 

£ 
5,343,663 

3,727,388 
785,405 
575,168 

1,792,222 

London  Chartered 

English,    Scottish, 

and  Australian. 

Oriental 

236,304 

365,004 
9;M,517 

City 

795,474 

Mercantile     Bank 
of  Sydney 

501,342 

Total 

£1,114,410 

.37,008 

13,650,891 

2.54,178 

15.05(k487 

AUSTRALIAN   TRADE  AND   FINANCE. 


117 


QUEENSLAND. 

Assets. 


Banks. 

Coin  and 
Bullion. 

Bank 
Prem- 
ises, 

Account    ■ 
with   otHer 
Banks. 

Debts  to 
Bank. 

Total. 

New  South  Wales 
Union,    

£ 

208,411 
96,617 
98,155 

42,198 

137,889 
28,970 

£ 
20,833 
16,269 
23,048 

12,185 

21,454 
9,000 

£ 

9,082 
20,795 
39,716 

3,578 

7,375 
246 

£ 

761,789 
649,605 
703,981 

375,478 

591,426 
369,368 

£ 
1,000,115 

78;-!,  286 

National 

864,!KX) 

Commercial  Bank 
of  Sydney 

Australian      Joint 
Stock  Bank 

Australasian 

433,439 

758,143 
407,584 

Total 

£612,240 

102,789 

80,792 

3,451,646 

4,247,467 

Liabilities. 


Banks. 

Cirou- 
liition. 

Accept- 
ances. 

Deposits. 

Other  lia- 
bilities. 

Total. 

New  South  Wales 

Union  

National 

Commercial  Bank 

of  Sydney 

Australian'    Joint 

Stock  Bank 

Australasian 

£ 
107,439 
53,236 
71,972 

21,593 

85,236 
10,115 

£ 

462 

4,887 
887 

303 

1,535 
4,063 

£ 

771,454 
646,350 
528,983 

235,551 

451,285 
172,278 

£ 
13,052 

'32,821 

384 

3,636 

£ 
892,407 
604,473 
634,663 

257,831 

541,692 
186,456 

Total 

£349591 

12,137 

2,705,;k31 

49,893 

3,117,522 

118 


LONDON  BANKING  LIFE. 


VICTORIA. 

Assets. 


Banks. 

Coin  and' 
Bullion. 

Bank 
Prem- 
ises. 

Accounts 

with    other 

Banks. 

Debts 

to 
Bank. 

£ 
3,221,103 
2,037,195 
1,892,642 
3,148,281 
1,833,993 

892,508 
1,374,449 

1,347,937 
1,820,745 
1,073,190 

69,570 
140,735 

Total. 

Australasia 

Union 

New  South  Wales 
Victoria 

£ 
469,661 
249,141 
519,630 
609,310 
337,222 

92,477 
178,458 

171,807 
309,679 
179,444 

2,893 
1,902 

£ 

87,608 

60,129 

54,959 

149,531 

120,254 

52,549 
40,000 

60,294 
78,003 
39,530 

'  2,009 

£ 

12,917 
21,272 
66,704 
252,342 
25,168 

36,847 
17,026 

36,665 
47,375 
26,072 

3,358 
14,897 

£ 

2,791,289 
2,377,737 
2,533,935 
4,169,464 

London  Chartered 

English,     Scottish 

and  Australian. 

2,316,637 

1,074,381 
1,609,933 

1,616,703 
2,555,802 

Colonial    of    Aus- 
tralasia   

National 

Commercial 

Australian  and  Eu- 
ropean    

City  of  Melbourne 

1,318,236 

75,831 
159,543 

Total 

£3,121,624 

744,866 

560,643 

17,852,348 

22,279,481 

Liabilities. 


Banks. 

Circu- 
lation. 

Accept- 
ances. 

Deposits. 

Other    lia- 
bilities. 

Total. 

Australasia 

Union 

£ 
157,485 

97,634 
168,797 
296,682 
140,416 

63,253 
85,625. 

92,852 
160,147 
106,207 

12,204 

£ 

13,169 

32,632 

665 

13,6.31 

1,458 

'  '6*445 

2,004 

3,381 

877 

£ 
1,750,655 
1,508,550 
1,484,189 
2,983,605 
1,254,675 

629,582 
854,761 

1,011,446 

l,322,0i)6 

835,197 

25,189 
75,023 

£ 

"2,"272 

2,313 

116,478 

1,046 

12,812 
20,047 

30,564 

37,238 
68,636 

14 
10 

£ 
1,921,309 
1,641,088 

New  South  Wales 
Victoria 

1,655,864 
3,410,396 

Loudon  Chartered 

English,    Scottish, 

and  Australian. 

Oriental 

1,397,595 

705,647 
966,878 

Colonial    of    Aus- 
tralasia   

National    

1,1.36,866 

1,522,862 

Commercial 

Australian  and  Eu- 
roDPan      

1,010,917 
37,307 

City  of  Melbourne 
Total 

1,311 

76,344 

£1,382,613 

74,262 

1.3,734,968 

291,330 

15,483,173 

AUSTRALIAN   TRADE   AND   FINANCE. 


119 


Banks. 


SOUTH  AUSTRALIA. 
Assets. 


Coin  and 
Bullion. 


South  Australia.. 

Australasia 

Union 

National 

Adelaide 

English,  Scottish, 
and  Australian 
Chartered 

Total 


137,898 
79,478 
44,600 

113,551 
58,873 

45,227 


£479,127 


Bank 
Premises. 


Accounts 

with  other 

Banks. 


35,413 
15,325 
14,000 
332,933 
12,235 

11,055 


420,051 


36,883 


3,483 
54,401 
11,029 

8,674 


114,470 


Debts  to 
Bank. 


849,592 

335,214 

315,345 

1,031,432 

1,010,383 

677,864 


Total. 


1,069,696 

430,017 

377,428 

1,232,317 

1,092,020 

742,820 


4,219,830  4,934,298 


Liabilities. 


Banks. 

Circula- 
tion. 

Accept- 
ances. 

Deposits. 

Other 
Liabilities. 

Total. 

South  Australia... . 

Australasia 

Union 

£ 

88,207 
33,261 
16,315 
144,387 
57,394 

63,474 

£ 

3,941 
1,585 
2,385 
1,859 
550 

£ 

490,088 
218,882 
161,943 
785,088 
425,181 

424,012 

£ 
16,061 

4,922 
91,096 

4,358 

£ 

598,297 
253,228 
180,593 

National 

936,256 

Adelaide 

574,221 

Slnglish,  Scottish,  ) 
and  Australian  ^ 
Chartered           ) 

491,844 

Total 

£403,038 

10,270 

2,594,694 

116.437 

3,034,439 

120 


LONIX^N    BANKING    LIFE. 


As  the  old  Van  Diemen's  Land  Settlement  was 
converted  into  the  colony  of  Tasmania  as  recently  as 
1854,  the  statistics  are  not  very  complete  ;  but  the 
most  recent  are  now  given. 


TASMANIA. 

Assets. 


Banks. 

Coin  and 
Bullion. 

Bank 
Premises. 

Accounts 

with  other 

Banks. 

Debts  to 
Bank. 

Total. 

Australasia  .    .     . 
Commercial      .    . 
Tasmania     .     •     . 
Union       .     •     .     . 
Van  Diemen's  Land 

£ 

55,770 

58,093 

8,240 
87,540 
35,815 

£ 

12,500 
13,200 

12,576 
2,750 

£ 

12,720 
377 

1,824 

£ 

34,395 
514,967 

92,059 
212,524 
391,270 

£ 
102,665 
598,980 
100,676 
312,640 
431,659 

Total   .     .     . 

£245,458 

41,026 

14,921 

1,245,215 

1,546,520 

Liabilities. 


Banks. 

Circula- 
tion. 

Accept- 
ances. 

Deposits. 

OtJier 
Liabili- 
ties. 

Total. 

Australasia  .... 
Commmercial  .     .     . 
Tasmania     .... 

Union 

Van  Diemen's  Land 

£ 

12,002 
37,866 
4,555 
24,185 
26,628 

£ 

1,663 
1,308 

2,037 

£ 
234,930 
414,407 
41,093 
342,659 
244,495 

£ 
2,933 

£ 
248,595 
453,681 
45,648 
368,881 
274,056 

Total     .    .     . 

£105,236 

5,008 

1,277,584 

2,933 

1,390,761 

AUSTRALIAN   TRADE   AND   FINANCE. 


121 


There  is  only  one  bank  in  Western  Australia  with 
distinctive  returns  for  the  colony, — the  figures  relat- 
ing to  the  National  Bank  being  for  all  its  branches. 


WESTERN  AUSTRALIA. 

Assets. 


Bauks. 

Coiii  and 
Bullion. 

B.aiik 
Premises. 

Accounts 

with  other 

Banks. 

Debts  to 
Bauk. 

Total. 

Western  Australian 
National     .... 

£ 

23,173 
526,593 

£ 

1,200 
111,305 

£ 

25,200 

26,989 

£ 

169,558 
2.991,241 

£ 

219,131 
3,656,128 

Total     .     .     .    £ 

549,766 

112,505 

52,189 

3,160,799 

3,875,259 

Liabilities. 


Banks. 

Circula- 
tion. 

Accept- 
ances. 

Deposits. 

other 
Liabilities 

Total. 

Western  Australian 
National     .... 

£ 

10,627 
323,512 

£ 

1,060 

7,982 

£ 

143,524 

2,267.883 

£ 

10 
49,146 

£ 

155,221 
2,648,523 

Total     .     .     .    £ 

334,139 

9,042 

2,411,407 

49,146 

2,803,744 

To  assist  in  a  complete  exposition  of  the  influences 
that  Australia  is  exercising  on  the  finances  of  the 
world,  the  production  of  gold  has  to  be  followed,  it 
being  obvious  that,  after  the  elfect  locally,  there- are 
elements  of  strength  imparted  to  all  other  countries 
able  to  employ  the  precious  metal  commercially  or 
as  a  circulating  medium. 


122 


LONDON   BANKING   LIFE. 


Actual  Pvodartiuns  of  Gold. 


Year. 

New  South  Wales. 

Victoria. 

New  Zealand. 

£ 

£ 

£ 

1851 

600,000 

600,000 



1852 

1,200,000 

10,900,000 

•  ■  •  • 

1853 

1,100,000 

12,600,000 

■  ■  •  • 

1854 

500,000 

9,600,000 

•  •  •  • 

1855 

500,000 

11,200,000 

•  •  •  ■ 

1856 

600,000 

11,900,000 

•  •  •  • 

1857 

700,000 

11,000,000 

•  >  •  • 

1858 
1859 

1,100,000 
1,200,000 

10,100,000 
9,100,000 

100,000 

1  (\C\  CiCiCi 

1860 

1,400,000 

8,600,000 

100,000 

1861 

1,600,000 

7,900,000 

800,000 

1862 

2,400,000 

6,900,000 

1,600,000 

1863 

1,700,000 

6,400,000 

2,500,000 

1864 

1,400,000 

6,220,000 

1,900,000 

1865 

1,200,000 

6,200,000 

2,200,000 

1866 

1,000,000 

5,900,000 

2,900,000 

1867 

900,000 

5,700,000 

2,900,000 

1868 

1,000,000 

6,000,000 

3,200,000 

1869* 

900,000 

7,250,000 

2,362,995 

1870 

1,200,000 

6,680,000 

2,163,910 

1871 

1,000,000 

,  6,590,902 

2,787,520 

1872 

1,100,000 

6,000,000 

1,731,261 

1873 

900,000 

4,884,000 

1,800,000 

1874 

1,000,000 

4,620,000 

1,987,425 

1875 
Total  £ 

1,100,000 

4,600,000 

1,800,000 

27,800,000 

185,424,902 

32,933,111 

In  addition  to  these  enormous  amounts  from  the 
well  known  gold  producing  colonies,  Queensland  has 
for  some  years  been  exporting  largely : — 

£ 

1870  851,'112 

1871   400.000 

1872  500,000 

1873  750,000 

1874  1,000,000 

1875 1,374,000 

Total 4,375,412 

♦  There  is  some  little  confusion  in  these  statistics,  since  the  estahlishment 
of  the  Branch  Mint  in  Sydney,  from  the  fact  that  gold  is  imported  there  for 
the  purposes  of  coinage. 


AUSTRALIAN   TRADE  AND   FINANCE. 


123 


The  result  is  then,  from  Australia  or  New  Zea- 
land, there  has  not  been  less  than  an  aggregate  of 
£250,000,000  added  to  the  stores  of  gold  in  the  world. 
This  is  quite  irrespective  of  the-production  of  Cali- 
fornian  or  Siberian  mines,  which  cannot  be  accurately 
followed  by  English  statisticians. 

The  details  on  Australian  insolvencies  are  not  very 
complete,  but  the  following  may  be  relied  on  : — 


Colony. 


New  South  Wales 
Victoria     .     .     . 


1874. 


Liabilities.      Assets. 


236,000 
10,500 


79,000 
7,000 


1875. 


Liabilities.     Assets 


417,000 
19,631 


188,000 
7,156 


Although  correct,  these  figures  do  not  embrace  the 
private  arrangements  of  debtors  with  their  creditors. 
Yet  it  is  desirable  to  bear  in  view  that,  as  a  rule, 
the  insol'vent  laws  are  more  generally  made  available 
in  the  new  than  in  old  countries.  As  in  the  United 
States  of  America,  so  in  the  British  Colonies,  there  is 
unfortunately  a  decreasing  sensitiveness,  instead  of  a 
delicacy  of  feeling  and  a  high  sense  of  honor  observed 
with  regard  to  liabilities. 

The  prosperity  of  Australia  largely  depends  on  the 
production  of  wool.  Over  the  Island  Continent  there 
are  enormous  tracts  of  land  exclusively  devoted  to 
sheep  farming,  and  although  it  is  apparent,  from  the 
most  recent  geographical  expeditions,  that  all  the  best 
land  is  now  rapidly  coming  under  occupation,  yet 
there   are  many   improvements   in   fencing,   in    the 


124 


LONDON   BANKING  LIFE. 


methods  of  shei)herding,  and  in  the  selection  of 
grasses,  which  may  tend  both  to  increase  the  "  carry- 
ing power"  of  station  properties,  as  well  as  to  im- 
prove the  character  of  the  flocks.  It  may,  therefore, 
be  expected  that,  large  as  the  exports  of  wool  have 
been,  there  are  higher  figures  yet  to  be  reached.  The 
following  statistical  information  may  serve  as  a  guide 
to  the  future. 


Colony. 

1806. 

1867. 

1868. 

1869. 

1870. 

New    South    Wales  j 

and  Queensland. .  ( 

Victoria 

Bales. 
82,184 

141,931 

16,422 

40,510 

3,565 

64,243 

106,794 

Bales. 
101,420 

170,444 

15,943 

45,236 

3,596 

76,729 

128,287 

Bales. 
121,439 

211,243 

17,920 

55,173 

4,175 

81,268 

141,916 

Bales. 
121.401 

206,053 

17,121 

65,137 

4,779 

85,119 

134,349 

Bales. 
142,352 

209,261 

Tasmania 

17,318 

Soutli  Australia 

Western  Australia  . . 
New  Zealand 

68,545 

5,298 

106,628 

Cape  of  Good  Hope. . . 

124,473 

Bales 

455,649 

541,655 

633,134 

633,959 

673,875 

Colony. 

1871. 

1872. 

1873. 

1874. 

1875. 

New    Soutli    Wales  ) 

and  Queensland. .  j 

Victoria 

Bales. 

153,655 

216,476 

15,584 

65,960 

4,743 

110,595 

126,977 

Bales. 

128,847 

198,685 

14,623 

70,522 

5.448 

104,584 

138,892 

Bales. 

128,695 

209,675 

14,693 

74,918 

6,275 

117,738 

156,027 

Bales. 

136,748 

265,417 

17,223 

85.590 

6,285 

143,313 

164,194 

Bales. 
143,107 
279,741 

Tasmania 

18,956 

South  Australia 

Western   Australia.... 

New  Zealand 

Cape  of  Good  Hope. . . 

101,544 

6,653 

146,619 

174,598 

Bales 

693,990 

661,601 

708,021 

818,770 

871,218 

The  public  sales  in  1876  will  doubtless  show  a  con- 
siderable fall  in  the  price  of  wool ;  but  if  it  arises 
from  depressed  trade  in  England,  rather  than  from 
overproduction  in  the  Colonies,  the  effect  will  only 
be  temporary,  although  of  importance  to  those  con- 
nected with  Australian  interests. 


•      CAPE  OF  GOOD  HOPE  AND  SOUTH  AFRICA.   125 

CHAPTER  XV. 
CAPE  OF  GOOD  HOPE  AND  SOUTH  AFRICA. 

"  On  the  all  important  question  of  a  possible  union  of  South  Africa,  Her 
Majestifs  Government  icill  readily  give  their  earnest  and  favorable 
attention  to  any  snr/gestion  that  may  be  made.  Assuming  always  a 
due  regard  to  considerations  of  Imperial  and  Native  policy,  this 
great  object  is  one  to  the  achievement  of  ivhich  Her  Majesty's 
Government  would  be  prepared  to  contribute  their  best  and  most 
cordial  assistance.  It  is  a  measure  ivhich  woxdd  tend  to  develop  the 
prosperity  of  South  Africa;  to  sweep  aicay  mayiy  subjects  of  pro- 
longed and  unfruitful  discussion,  and  to  knit  together  the  scattered 
com7nuniiies  of  the  European  race  into  a  powerful  and  harmonious 
union,  valuable  alike  for  the  interests  of  themselves  and  the  whole 

Empire." 

LoKD  Carnarvon. 

The  "  diamond  fields  "  discovered  near  the  northern 
boundary  of  these  colonies,  has  led  to  unexpected 
prosperity.  It  was  in  1873  that  searching  for  dia- 
monds begun,  and  since  then  not  less  than  X 7,000,- 
000  has  from  that  source  been  added  to  the  exports 
of  the  colony.  The  result  has  been  not  only  a  large 
increase  of  population,  but  a  trade  of  corresponding 
importance. 

Until  a  few  years  previous  to  these  discoveries,  the 
banking  system  was  wholly  of  a  local  character, 
adapted  to  small  townships  or  a  special  class  of 
traders.  The  consequence  \xas  that  no  institution 
possessed  any  large  resources  ;  credit  was  confined 
to  the  district  in  which  the  bank  was  situated ;  and 
there  were  neither  firmly  established  agencies  nor 
recognized  offices  in  England.  In  1863  the  first 
joint-stock  bank  was  started  in  this  country.     The 


126  LONDON   BANKING   LIFE. 

following  year  a  similar  institution  was  launched, 
and  together  they  competed  to  give  increased  facil- 
ities and  importance  to  the  credit  system  of  South 
Africa.  One  of  these  banks,  by  bold  and  skilful 
combination,  arranged  terms  for  the  purchase  of 
several  small  banks.  This  movement  would  have  been 
successful  in  the  hands  of  experienced  and  prudent 
financiers,  but  there  was  undue  competition,  rates 
were  fluctuating,  credit  loosely  granted,  indiscrimin- 
ate business  encouraged  and  preponderating  local  in- 
fluences were  producing  serious  efl^ects.  It  was  soon 
evident  that  the  seeds  of  evil  were  being  widely  dis- 
seminated ;  that  times  of  ease  were  again  being  proved 
times  of  danger ;  that  instead  of  a  course  of  quiet, 
systematic,  and  patient  proceeding,  foundations  were 
hastily  laid,  a  huge  superstructure  of  credit  was 
raised,  and  facilities  readily  granted, — difiicult  of 
subsequent  control  and  productive  in  the  end  of  dis- 
astrous results. 

There  were  then  strong  inducements  to  a  liberal 
and  active  policy.  Throughout  the  world,  credit  of 
every  kind  ran  high.  Profits  had  long  continued 
upon  a  dazzling  scale.  Australia,  in  its  gold  produc- 
tions and  mighty  progress,  had  incited  and  allured 
the  speculative.  The  banking  accommodation  there, 
so  facile  and  successful,  was  assumed  to  be  easily  ap- 
plied else\vhere  to  produce  the  same  or  even  extended 
advantasres.  The  mere  creation  of  new  banks  in 
England  caused  other  banks  of  ephemeral  nature  to 
be  started  that  business  might  be  fostered  and  stimu- 
lated. It  is  notorious  there  were  men  who  applied 
themselves  to  fathom    the  depths    of  the  "limited 


CAPE  OF  GOOD  HOPE  AND  SOUTH  AFRICA.   127 

liability  "  principle ;  by  forced  and  ingenious  labors 
they  moved  half-a-dozen  schemes,  creating  shares,  or- 
ganizing branches,  finding  unfledged  bank-officers, 
and  starting  them  on  empirical  missions  to  all  parts 
of  the  world. 

There  was  a  degree  of  justice,  certainly  more  than 
"poetical,"  almost  tragic,  which  followed  this  colo- 
nial excitement.  When  the  business  of  Port  Eliza- 
beth, for  the  most  part  originating  with  the  old  local 
banks,  was  transferred,  the  grave  assurance  was  given 
that  for  fifteen  years  not  more  than  £1,000  of  bad 
debts  were  incurred  !  Yet  within  six  months  it  was 
found  no  care  had  been  exercised  in  taking  over  the 
business;  and  "serious  losses"  had  been  the  result 
of  the  new  system  of  banking !  There  was  soon 
XI  33,000  overdue  paper  in  the  hands  of  one  bank, 
and  the  statistics  of  two  banks  showed  X 70,512 
among  "  bills  overdue,  but  not  paid."  The  manage- 
ment of  a  large  and  extended  business  was  deemed 
"  easy  and  simple  ;  "  the  character  and  condition  of 
"  all  the  people  were  so  well  known,"  the  credit 
system  was  positively  "  safer  than  in  most  other  parts 
of  the  world ! "  These  views  were  uttered  by  an 
authority  whose  account  was  largely  overdrawn,  and 
whose  position  caused  him  early  to  retire  from  the 
direction  of  the  bank  he  favored  with  his  prudential 
maxims.  His  doctrines,  indeed,  were  soon  reversed 
by  a  local  monetary  crisis  which  placed  all  the  im- 
portant districts  in  difficulties.  It  was  seen  that  the 
traders  had  studied  each  other's  peculiarities  by  cross 
bill  transactions.  There  was  a  large  issue  of  accom- 
modation  paper,   and    unwieldy,  lengthened   credit 


128  LONDON   BANKING   LIFE. 

among  the  storekeepers,  while  the  "  up  country " 
traders  were  of  course  unsound,  and  often  of  a  most 
fallacious  character.  Again,  it  was  asserted  that  the 
new  banking  system  was  "safe,"  because  it  had  so 
many  branches !  Yet  foremost  among  the  meas- 
ures of  contraction,  the  branch  establishments  were 
reduced,  those  newly  found  being  a  source  of  danger 
and  unproductive  ;  besides  which,  a  restriction  of  en- 
gagements and  liabilities  was  imperatively  required 
by  the  circumstances  of  the  times. 

It  would  be  useless  to  attempt  any  extenuation  of 
these  flagrant  offences  against  sound  banking  prin- 
ciples. Yet  it  is  obvious  that  in  all  communities 
changes  of  men,  variations  of  policy,  constant  revision 
of  principles,'  are  indispensable  to  safety,  which  is 
only  secured  by  the  application  of  measures  to  cir- 
cumstances constantly  demanding  new  thought,  new 
energies,  and  new  combinations.  If  the  blundering 
of  individuals  could  be  compared  with  the  blunder- 
ing of  states,  there  would  be  the  significant  proof  that 
the  minds  of  men  need  contact  with  the  world  be- 
yond their  finite  sphere  ;  and  that  there  is  no  more 
fatal  mistake  than  the  shrouding  over  of  difficulties, 
or  the  belief  that  things  can  be  "  let  alone,"  which 
need  vigorous  attention,  or  that  institutions  will 
"  last  our  time  "  when  they  are  already  worn  out, 
effete,  or  crumbling  to  decay  from  the  creation  of 
new  forces  or  the  attacks  of  fresh  competition. 

The  latest  banking  returns  of  the  South  African 
Colonies  may  be  introduced  to  show  how  great  has 
been  the  improvement  since  the  weakness  of  earlier 
years  has  been  eradicated. 


CAPE  OF  GOOD  HOPE  AND  SOUTH  AFRICA.      129 
THE  CAPE  OF  GOOD  HOPE  BANKS. 
Assets. 


Banks. 

Coin  and 
Bullion. 

Landed 
Property. 

Balances 

due   from 

other 

Banks. 

Debis 

due 

to  the 

Bank. 

Total. 

Cape  of  Good  Hope 

South  African   .    . 

Colonial     .... 

Cape  Commercial  . 

Union 

London  and  South  ) 
African  .     .     .    ) 

£ 

44,582 
16,327 
12,857 
16,775 
26,062 

110,837 

£ 

4,354 

4,591 

124 

50,564 

1,839 
25,904 

£ 

176,601 

13,839 

3,961 

222,347 

59,462 

40,849 

£ 
439,157 
191,281 
131,752 
317,304 
320,635 
809,942 

£ 
664,694 
226,038 
148,694 
606,990 
407,998 
987,532 

Total   .    .    £ 

227,440 

87,376 

517,059 

2,210,071 

3,041,946 

Liabilities. 


Banks. 

Notes 

in 
Circula- 
tion. 

Bills 
in 
Circula- 
tion. 

Other 
Liabil- 
ities. 

Deposits. 

Total. 

Cape  of  Good  Hope 

South  African    .    . 

Colonial     .... 

Cape  Commercial  . 

Union 

London  and  South  1 
African  .     .     .     ) 

£ 
52,720 
7,970 
9,300 
19,610 
30,275 
25,555 

£ 
1,852 

38,954 

£ 

263,074 

67,925 

78,125 

150,395 

167,929 

489,707 

£ 
347,047 
150,143 
61,269 
398,032 
209,793 
472,271 

£ 
664,693 
226,038 
148,694 
606,991 
407,997 
987,533 

Total  .     .    £ 

145,430 

40,806 

1,217,155 

1,638,555 

3,041,946 

130 


LONDON  BANKING  LIFE. 


EASTERN  PROVINCE  BANKS. 

Assets. 


Banks. 

Coin  and 
Bullion. 

Landed 
Property. 

Balances 

due  from 

other 

Banks. 

Debts 

due 

to  the 

Bank. 

Total. 

£ 

£ 

£ 

£ 

£ 

Standard  of  Brit-  ) 
ish  Soutli  Africa  ) 

430,500 

64,986 

588,990 

2,047,957 

3,132,433 

Worcester     Com-  ) 
mercial  ...    J 

2,949 

2,789 

663 

57,546 

63,947 

Graaff-Reinet     .    . 

7,762 

1,500 

16,079 

123,202 

148,543 

Caledon    Agricul-  1 
tural  .     .     .    .    ) 

1,871 

1,367 

6,911 

22,966 

33,115 

Somerset  East    .     . 

8,749 

115 

4,048 

41,347 

49,259 

Kaffrarian  Colonial 

22,566 

806 

6,079 

78,957 

108,408 

Total   .    .    £ 

469,397 

71,563 

622,770 

2,371,975 

3,535,705 

Liabilities. 


Banks. 

Notes 

in 
Circula- 
tion. 

Bills 
in 
Circula- 
tion. 

Other 
Liabil- 
ities. 

Deposits. 

Total. 

Standard  of  Brit-  ) 
ish  South  Africa  ) 

"Worcester     Com-  ) 
mercial  .     .     .    ) 

Graaff-Reinet     .     . 

Caledon   Agricul- ) 
tural  ....    5 

Somerset  East   .     . 

Kaffrarian  Colonial 

£ 
274,814 

7,010 

24,275 

7,235 

3,851 
5,050 

£ 
35,111 

£ 
1,178,231 

19,432 

54,814 

15,233 

22,355 
36,439 

£ 
1,634,144 

37,505 

69,454 

10,547 

23,053 
66,318 

£ 
3,122,300 

63,947 

148,543 

33,015 

49,259 
107,807 

Total  .     .    £ 

322,235 

35,111 

1,826,504 

1,841,021 

3,524,871 

CAPE  OF  GOOD  HOPE  AND  SOUTH  i^FRICA.   131 

It  may  safely  be  asserted  that  colonial  banking  is 
not  absolutely  safe  when  resting  rnerely  on  local  in- 
fluences. There  is  an  absence  of  disinterestedness, 
of  high  principles  and  of  impartial  rules  by  which 
financial  undertakings  ought  to  be  regulated.  Why, 
indeed,  should  it  be  otherwise  ?  Compare  the  colo- 
nies by  themselves,  or,  better  still,  measure  them  by 
the  standards  to  which  they  are  equal.  It  is  not  ex- 
pected that  vestrymen  and  guardians  of  even  the 
largest  of  metropolitan  parishes  are  immaculate 
enough  to  find  "  blots  on  their  own  escutcheon  ; " 
to  expose  the  blackness  of  their  strongholds;  the 
meanness  of  their  own  body ;  or  the  baseness,  the 
cupidity,  the  ignorance  of  corporate  functionaries. 
Motives  of  self-interest  bind  them  together.  The 
moral  fall  of  one  might  lead  to  the  destruction  of. 
others,  and  the  weakness  of  many  members  would  be 
found  to  be  detrimental  to  the  body  politic. 

So  it  is  with  the  issue  of  spurious  bills,  or  the  dis- 
pensing of  over  liberal  credit.  It  goes  on  for  a 
period ;  it  runs  its  course  of  renewal,  of  transfer  from 
one  account  to  another,  but  there  is  an  inevitable 
necessity  for  re-payment,  and  it  is  when  the  rotten- 
ness is  exposed  and  weak  points  are  found  out,  that 
reform  are  demanded.  Recriminations  ensue ;  per- 
haps a  patching  up,  or,  worse  still,  the  carrying  on  of 
insolvent  houses  is  allowed.  All  this  is  as  "old  as 
the  hills,"  wherever  financial  affairs  have  been  ad- 
ministered. The  only  remedies  are  honest,  straight- 
forward exposure,  or  absolute,  entire  expurgation,  be- 
fore the  business  can  be  placed  in  train  for  settle- 
ment.    All  other  remedies  are  useless.     Complaints 


132  LONDON   BANKING  LIFE. 

about  officers  are  unavailing,  and  the  worn-out  plea 
of  bad  markets  or  unsound  trade  should  not  be  ad- 
mitted when  they  can  be  controlled  by  wisdom,  fore- 
thought and  determination. — Too  often  the  men  and 
not  the  sj^stem  are  at  fault.  Sound  principles,  un- 
impeachable integrity,  freedom  from  combinations 
among  themselves  are  necessary,  and  there  must  be  no 
fear  of  consequences  when  a  vigorous  effectual  policy 
has  to  be  enforced.  It  is  futile  to  expect  these 
qualities,  except  men  of  the  right  class,  adequately 
paid,  are  the  executive  officers.  Indeed  it  is  a  vague 
sentiment  to  assume  high-mindedness  from  directors 
when  they  have  the  interest  of  private  concerns  to 
promote,  their  friends  to  serve,  or  the  "powers  that 
be,"  to  please,  flatter,  or  truckle  to  for  any  purpose. 
These  truths  have  long  been  recognized  from  the 
stern  lessons  of  the  past.  It  should  be  urged,  too, 
that  all  banking  systems  require,  as  a  necessity  of 
success,  good  collateral  securities.  The  old  East 
Indian  rule  of  hypothecation  should  be  enforced  for 
advances  against  produce. 

Punctuality  in  bills  and  all  time  engagements  should 
be  fostered  as  though  it  were  an  absolute  appanage  of 
the  bank — an  integral  part  of  itself,  a  necessity  of  its 
very  existence.  Then,  with  well-regulated  rates  and 
a  freedom  from  undue  competition,  business  will  be 
sound,  profitable,  and  well-conducted ;  then,  too,  will 
safety  be  secured  for  the  colonies  concerned,  and 
for  those  who  embark  their  capital  in  such  enter- 
prises. 

The  banking  system,  formerly  weak,  if  not  un- 
sound, has  become  well  established,  by  being  con- 


CAPE  OF  GOOD  HOPE  AND  SOUTH  AFRICA.   133 

ducted  on  the  strict  principles  thus  enforced,  and  it 
generally  conforms  to  those  regulations  observed  in 
highly  civilized  countries. 

The  trading  statistics  of  the  recent  years  show  re- 
markable progress : — 


I'ear. 

Imports. 

Exports- 

£ 

.£ 

1871 

2,585,298 

3,531,609 

1872 

4,388,728 

4,757,494 

1873 

5,130,065 

3,907,911 

1874 

5,558,215 

4,233,561 

1875 

5,731,319 

4,088,125 

In  the  future  of  these  colonies  there  will  be  much 
of  immense  importance  to  the  commerce  of  England. 
The  discoveries  of  Livingstone  and  of  Cameron  are 
alone  sufficient  to  prove  that  new  fields  of  enter- 
prise are  being  opened  ;  other  men  of  science  and 
genius  have  to  follow  the  pioneers,  and  it  is  to  be  fer- 
vently hoped  that  the  colonists  of  South  Africa  will 
be  able  to  turn  to  profitable  account  the  opportunity 
for  developing  good  staple  products,  and  creating 
new  markets  for  manufacturers. 


134  LONDON   BANKING  LIFE. 


CHAPTER   XVI. 
SHIPS  AND  MARINE  INSURANCE. 

"  The  world  is  governed  by  conciliation,  compromise,  influence  ;  the 
recognition  of  the  rights  of  others,  and,  in  addition,  a  general  con- 
viction, resulting  from  explanations  and  a  good  understanding,  that 
it  is  for  the  interest  of  all  parties  that  business  should  be  conducted 
in  a  satisfactory  and  peaceful  manner." 

Benjamin  Disraeli. 

At  no  period  in  the  history  of  commerce  have  there 
been  "  facts,  failures,  and  frauds "  in  navigation 
more  serious  than  those  of  the  last  few  years.  The 
honor  of  ship-owners,  and  those  subject  to  their 
authority,  has  been  impugned;  property  in  Marine 
Insurance  Companies'  shares  is  often  nearly  annihi- 
lated ;  and  the  lives  of  thousands  are  sacrificed,  either 
through  neglect,  indifference,  or  cupidity.  With  an 
unparalleled  fleet,  and  an  ascendency  of  power  never 
previously  enjoyed  by  British  merchants,  there  are 
constant  proofs  that  strong  remedies  or  preventive 
measures  must  be  adopted  to  check  the  recklessness 
that  is*weakening  the  English  character,  and  lower- 
ing the  noble  profession  of  the  seaman  into  a  game  of 
chances,  rather  than  a  business  of  precision,  if  not  of 
certainty.  Hence  the  last  two  or  three  years  have 
witnessed  an  agitation  that  has  brought  the  subject 
under  the  attention  of  the  Legislature. 

The   principle    of    rendering    "  honor    to     whom 
honor  is  due  "  has  to   be  specially  associated    with 


SHIPS  AND   MARINE  INSURANCE.  135 

the  labors  of  Mr.  Samuel  Plimsoll,  who  has  for  many- 
years  been  strenuously  laboring  for  an  improvement  in 
the  navigation  laws.  He  has  hoped  to  accomplish  the 
object  by  legislation :  preventing  over-loading,  and 
deck-loading,  and  the  employment  of  unseaworthy 
ships ;  he  also  advocates  a  proper  survey  of  all  ves- 
sels during  construction,  and  previous  to  actual  ser- 
vice, together  with  a  thorough  revision  of  the  prin- 
ciples of  marine  insurance.  These  objects  have  en- 
gaged the  attention  of  the  country,  until  enthusiasm 
in  agitation  has  been  aroused,  at  times  with  painful 
consequences ;  but  on  the  whole  with  a  steady  and 
undeviating  progress  towards  ultimate  and  complete 
success. 

There  has  been  neither  wisdom  nor  expediency  in 
the  opposition  this  agitation  has  to  encounter.  The 
shipowners  have  assumed  to  themselves  the  spirit  of 
martyrs  ;  they  have  been  the  aggrieved,  the  suffer- 
ing, and  the  persecuted !  At  public  meetings,  and 
throughout  the  press,  the  watch  ward  has  been  "  No 
surrender,"  although  moderation  has  been  manifested 
by  their  opponents,  and  compromises  have  been  offer- 
ed. There  was  proof  in  the  Session  of  1875,  par- 
ticularly towards  its  close,  that  legislation  could  not 
be  longer  delayed.  The  consequence  was  the  Act 
of  the  13th  of  August,  1875,(38  &  39  Vict.  cap.  88), 
to  make  provision  for  giving  further  powers  to  the 
Board  of  Trade  for  stopping  unseaworthy  ships.  It 
provides  that  seamen  may  claim  protection  against 
going  to  sea  in  a  vessel  deemed  to  be  in  an  unsatis- 
factory condition.  It  also  enacts  that  no  cargo  of 
which  more  than  one-third   consists  of  any  kind  of 


136 


LONDON   BANKING   LIFE. 


grain  is  to  be  carried,  unless  contained  in  bags,  sacks, 
or  barrels,  or  secured  from  shifting  by  boards,  bulk- 
heads, or  otherwise.  There  is  also  a  penalty  of  500^. 
against  every  person  or  party  thereto  who  despatches 
a  ship  in  an  unseaworthy  condition ;  every  person 
who  attempts  the  same  or  is  party  thereto,  and  every 
master  who  knowingly  takes  the  ship  to  sea  is  made 
alike  liable.  A  load  line  in  future  is  to  be  painted 
amidships,  and  no  alteration  is  to  be  made  in  these 
marks  until  the  vessel  next  returns  to  the  United 
Kingdom.  The  penalty  for  neglecting  this  provision, 
or  for  defacing  these  lines,  is  100/.  It  is  also  pro- 
vided that  the  shipowner  is  to  be  personally  liable  to 
the  master,  seamen,  and  apprentices  of  the  vessel 
for  neglect  of  prof)er  measures  to  insure  the  sea- 
worthiness of  the  vessel  at  the  commencement  of 
and  during  the  voyage. 

The  success  thus  achieved  proves  that  the  subject 
cannot  remain  in  its  present  position.  The  rate  at 
which  shipping  property  is  increasing  will  make  it 
more  incumbent  than  ever  for  the  Government  to  be 
supported  by  a  sound  and  enlightened  public  opinion. 
The  statistics  deserve  close  attention  : 


Total  Tom 

age  Belonging'  to 

the   United  Kingdom  and  British 

Possessions, 

Year. 

Sailing  Vessels. 

Steam  Ships. 

Total. 

Tons. 

Tons. 

Tons. 

1850 

4,045,331 

177,631       1      4,232,962 

1860 

5,210,824 

500.144 

5,710,968 

1870 

5,947,000 

1,202,134 

7, 149. 134 

1871 

5,731,088 

1,411,803 

7,142,891 

1872 

5,573,190 

1,640,639 

7,213,829 

1873 

5,468,492 

1,825,738 

7,294,230 

1874 

5,546,237  . 

1,987,235 

7,533,492 

SHIPS   AND   MARINE   INSURANCE.  137 

Concurrently  with  this  increase  there  has  been  a 
decrease  in  the  shipping  of  the  United  States.  The 
sailing  vessels  have  receded  from  4,485,931  tons  in 
1860  to  3,482,760  tons  in  1873.  Steam  shipping  of 
the  States  has  only  increased  in  the  same  period  from 
867,937  tons  to  1,156,443  tons.  As  the  carrying  trade 
of  the  world  is  thus  more  largely  than  ever  conducted 
in  British  ships,  it  becomes  a  serious  responsibility 
for  the  business  to  be  well  and  wisely  controlled. 
There  are,  however,  symptoms  of  declining  virtue 
and  probity,  and  the  "  signs  of  the  times  "  demand 
that  attention  be  directed  to  effect  salutary  improve- 
ments, so  that  no  possible  reflection  should  attach  to 
the  honor  of  merchants  or  ship-owners. 

The  wreck  register  of  the  Board  of  Trade  is  not 
pleasant  reading,  even  on  its  own  merits.  The 
figures  furnish  materials  to  convince  the  public  mind 
that  reforms  have  been  rendered  compulsory.  It  is 
obvious  that  it  will  no  longer  be  sufficient  to  rely  on 
self-interest ;  but  to  legislate  for  the  protection  of 
life  and  property.  It  is  af)palling  to  reflect  on  the 
misery,  the  wretchedness,  the  destitution,  which  one 
great  casualty  at  sea  may  cause,  but  look  at  the 
aggregate  loss,  apart  from  money  value,  of  human 
life,  with  homes  deprived  of  the  ''  bread  winners," 
the  hopes  of  families  destroyed,  and  then  the  statis- 
tics will  not  be  without  solemn  warning.  Were  it 
expedient  the  names  of  vessels  could  be  furnished, 
which  would  harrow  the  feelings  of  those  who  have 
to  lament  that  the  most  ordinary  precautions  of  com- 
mon sense,  or  the  application  of  the  simplest  rules  of 
navigation,  have  been  neglecte'd. 


138 


LONDON   BANKING  LIFE. 


Tear. 

Absolute 
Wrecks. 

1860 

476 

1861 

513 

1862 

455 

1863 

503 

1864 

386 

1865 

470 

1866 

562 

1867 

656 

1868 

527 

1869 

578 

1870 

500- 

1871 

473 

1872 

310 

1873 

496 

1874 

346 

Partial 
Wrecks. 


605 
658 
695 
830 
653 
832 
876 
1,020 
841 
873 
912 
820 
847 
1,236 
1,076 


Total. 


1,081 
1,171 
1,150 
1,333 
1,039 
1,302 
1,438 
1,676 
1,368 
1,451 
1,412 
1,298 
1,157 
1,732 
1,422 


It  would  be  a  terrible  lesson  to  statesmen  were  the 
attempt  made  to  resist  the  force  of  public  opinion, 
and  to  believe  that  legislation  will  be  powerless  in 
preventing  recklessness  of  human  life.  The  means 
of  ascertaining  the  total  loss  are  most  insufficient ; 
but  the  following  is  the  approximate  statement  of 
lives  lost  on  the  English  Coast : 


Year. 

Lives. 

Year. 

Lives. 

1861 

884 

1868 

824 

1862 

690 

1869 

933 

1868 

620 

1870 

774 

1864 

516 

1871 

626 

1865 

698 

1872 

590 

1866 

896 

1873 

728 

1867 

1,333 

1874 

506 

It  is  a  natural  sequence  of  these  statements  to 
watch  the  continuous  decline  in  the  resources  of 
Marine  Insurance  Companies,  arising   from   the   in- 


SHIPS   AND   MAKESTE   INSURANCE.  139 

creasing  demands  from  losses,  collisions  and  general 
average  claims.  The  fact  is  worthy  of  attention 
that  the  oldest  offices  are  being  "  sapped  and  under- 
mined," while  the  youngest  are  not  becoming  stronger. 
There  is,  in  fact,  a  weakening  process  going  forward 
from  reckless  competition,  and  efforts  by  which  each 
community  or  province  becomes  its  own  assurers, 
rather  than  allow  the  business  of  the  world  to  be 
regulated  by  those  laws  of  average  which  govern  the 
taking  as  much  as  the  adjustment  of  risks.  Although 
these  points  could  be  substantiated  by  details,  it  is 
sufficient  to  observe  that  there  are  now  12  offices  with 
English  shareholders,  and  with  a  strictly  London  or- 
ganization ;  there  are  agencies  from  most  of  the  princi- 
pal cities  of  Europe  ;  all  the  Australian  Colonies  and 
New  Zealand  are  represented  by  small  underwriting 
offices,  while  India,  China,  and  Japan  have  several 
agencies  for  the  transaction  of  business.  Although 
it  would  be  no  unimportant  inquiry  to  ascertain  the 
solvency  or  otherwise  of  these  various  offices,  the 
materials  are  not  obtainable  in  all  cases,  nor  would 
it  be  advisable  to  expose  dangers  without  being  at 
the  same  time  able  to  provide  remedies.  It  is  obvi- 
ous, however,  that  shippers  and  ship-owners  are  more 
than  ever  dispensing  with  real,  actual,  bond  fide  in- 
surances ;  that  they  are  becoming  their  own  assurers,  or 
avail  themselves  of  low  rates  in  offices  they  especially 
desire  to  favor,  or  worse  still,  to  take  advantage  of 
commissions  placed  before  them  as  allurements  to 
business.  The  following  information  will  elucidate 
these  points  : — 


140  LONDON   BANKING    LIFE, 

THE  OCEAN  MARINE  INSURANCE  COMPANY. 


Capital 

Reserve    Fund 

Balance  of  Underwriting  Ac- 
count and  Undivided  Profits 

Investments 

Interest 

Premiums 

Claims 

Expenses 


18G6. 


£ 

200,000 

40,000 

215,028 

443,469 

17,702 

176,000 

134,584 

15,561 


1875. 


£ 
200,000 
40,000 

82,584 

253,530 

13,290 

*63,774 

15,041 


*  After  deducting  all  Losses,  Averages,  &c.,  &c.,  &c. 


THE   UNIVERSAL   MARINE   INSURANCE    COMPANY, 

LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  7 
count  and  Undivided  Profits  f 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 

1875. 

£ 

£ 

250,000 

250,000 

113,508 

178,293 

181,811 

461,644 

9  392 

18,368 

213,554 

192,830 

240,085 

202,370 

18,039 

17,146 

SHIPS   AND    MARINE   INSURANCE. 


141 


THE  THAMES   AND  MERSEY  MARINE    INSURANCE 
COMPANY,  LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  7 
count  and  Undivided  Profits  ^ 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1865. 


£ 
200,000 
143,000 

301,394 

568,299 

28,506 

539,521 

567,721 

48,661 


1875. 


£ 
200,000 
225,000 

292,475 

698,320 

31,611 

359,159 

306,190 

27,399 


LONDON    AND    PROVINCIAL    MARINE    INSURANCE 

COMPANY. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  ) 
count  and  Undivided  Profits  ^ 

Investments 

Interest , .  . . , 

Premiums 

Claims 

Expenses 


1866. 


£ 
100,000 
25,000 

53,973 

162,760 

8,932 

145,695 

149,875 

16,219 


1875. 


100,000 
50,000 

50,534 

186,656 

8,771 

114,896 

120,641 

13,433 


142 


LONDON   BANKING    LIFE. 


THE    UNION    MARINE    INSURANCE    COMPANY, 
.      LIMITED. 


Capital 

Reserve  Fund - 

Balance  of  Underwriting  Ac-  7 
count  and  Undivided  Profits  ) 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 

1875. 

£ 

£ 

203,200 

203,200 

46,589 

140,678 

101,916 

290,476 

311,103 

13,340 

12,923 

226,000 

151,386 

208,380 

118,589 

15,945 

13,883 

THE   BRITISH  AND  FOREIGN  MARINE  INSURANCE 
COMPANY,  LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac- ) 
count  and  Undivided  Profits  | 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 


£ 
100,000 
26,285 

88,196 

168,777 

9,574 

269,368 

340,639 

31,353 


1875. 


£ 
200,000 
121,348 

205,019 

467,217 

23,432 

306,674 

125,663 

21,638 


SHIPS   AND   MAEINE  INSURANCE. 


143 


COMMERCIAL  UNION  ASSURANCE  COMPANY. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  } 
count  and  Undivided  Profits  \ 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 


25,000 

105,828 

110,972 

4,679 

211,939 

197,003 

14,925 


1875. 


198,240 

198,240 

6,302 

232,808 

199,789 

11,875 


ENGLISH  AND  SCOTTISH  MARINE  INSURANCE 
COMPANY,  LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac- } 
count  and  Undivided  Profits  \ 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 

1875. 

£ 

51,120 

•  • 

79,861 

1 

c3 

'O 

51,844 

3,565 

1-3 

127,597 

a 
t— 1 

149,317 

8,539 

144 


LONDON   BANKING   LIFE. 


THE  LONDON  AND  CALEDONIAN  MARINE  INSUR- 
ANCE COMPANY,  LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  > 
count  and  Undivided  Profits  | 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 


100,000 


104,803* 

108,274 

5,253 

227,923 

807,358 

16,007 


1875. 


c 
o 

•  rH 

a 

•  rH 

a" 


*  Balance  at  Debit  Profit  and  Loss  Account,  £T6,654. 


THE    MARITIME  INSURANCE    COMPANY,   LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  7 
count  and  Undivided  Profits  ) 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 


£ 
98,820 

130,594* 

149,599 

8,616 

203,730 

205,345 

10,051 


1875. 


£ 
98,920 
80,000 

108,260 

262,897 

11,007 

148,772 

144,714 

14,383 


*  Balance  at  Debit  Profit  and  Loss  Account,  £46,859. 


SHIPS   AND   MARINE  INSURANCE. 


145 


HOME  AND  COLONIAL  MARINE  INSURANCE 
COMPANY,  LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  > 
count  and  Undivided  Profits  ) 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866 


£ 
100,000 

59,883* 

123,319 

6,160 

192,204 

210,378 

10,853 


1875. 


£ 
100,000 


77,545 

3,178 

115,751 

127,126 

13,561 


*  Balance  at  Debit  Profit  and  Loss  Account,  f  |?S  f 'il'^Jf' 


I  1875,  £17,158. 


THE  NATIONAL  PROVINCIAL  MARINE  INSURANCE 
COMPANY,  LIMITED. 


Capital 

Reserve  Fimd 

Balance  of  Underwriting  Ac-  ) 
count  and  Undivided  Profits  | 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1866. 


£ 
49,265 

63,167* 

48,329 

3,615 

133,862 

165,027 

7,845 


1875. 


a 

.2 
'■*^ 

a 


*  Balance  at  Debit  Profit  and  Loss  Account,  £50,359. 


10 


146 


LONDON   BANKING  LIFE. 


THE  GLOBE  MARINE  INSURANCE  COMPANY, 
,      LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  7 
count  and  Undivided  Profits  f 

Investments 

Interest 

Premiums 

Claims 

Expenses 


THE  IMPERIAL  MARINE  INSURANCE  COMPANY, 

LIMITED. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac- ) 
count  and  Undivided  Profits  ) 

Investments 

Interest 

Premiums 

Claims 

Expenses 


P 

CO 


o 
o 
o 

a 

S-l 
0) 


a 
<v 

o 

12; 


1875. 


£ 
72,954 

57,510* 

23,291 
2,523 

82,767 

25,597 

7,689 


*  Balance  at  Debit  Profit  and  Loss  Account,  £78,892. 


SHIPS   AND   MARINE   INSURANCE. 


147 


THE  MERCHANTS'  MARINE  INSURANCE  COMPANY. 

LIMITED. 


Capital 

Reserve  Fund. 


Balance  of  Underwriting  Ac-  7 
count  and  Undivided  Profits  t 


Investments. 
Interest .... 
Premiums . . 
Claims. . . . 
Expenses . . . 


1871. 


£ 
100,000 

•  • 

31,906 

118,522 

3,962 

44,737 

5,431 

6,358 


1875. 


100,000 


30,358 

57,441 

3,254 

72,242 

71,769 

8,804 


THE  SOUTH  AUSTRALIAN  INSURANCE   COMPANY, 

LIMITED. 


Capital.  ...    

Reserve  Fund 

Balance  of  Underwriting  Ac-  ) 
count  and  Undivided  Profits  ) 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1873. 


£ 
50,000 
nil. 

23,920 

53,684 

2,980 

28,578 

14,313 

3,478 


1875. 


£ 
50,000 
20,000 

25,430 

49,527 

4,632 

26,539 

18,261 

6,044 


148 


LONDON   BANKING   LIFE. 


THE  ADELAIDE  MARINE  AND  FIRE  INSURANCE 

COMPANY. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  ] 
count  and  Undivided  Profits  | 

Investments 

Interest  (half-year) 

Premiums 

Claims 

Expenses . 


1870. 

1875. 

£ 

£ 

30,583 

30,583 

3,000 

.V. 

11,435 

.  . 

32,545 

2,017 

1,034 

16,172 

56,740 

10,076 

2,876 

MERCANTILE  MARINE  COMPANY  OF  SOUTH 
AUSTRALIA. 


Capital 

Reserve  Fund 

Balance  of  Underwriting  Ac-  > 
count  and  Undivided  Profits  \ 

Investments 

Interest 

Premiums 

Claims 

Expenses 


1870. 


£ 
37,500 

10,672 


11,547 

258 

1,718 


1875. 


£ 
50,000 
25,000 

45,923 

102,102 

2,751 

26,964 

19,491 

5,601 


> 


SHIPS   AND  MAEINE  INSURANCE.  149 

AUSTRALIAN  GENERAL  ASSURANCE  COMPANY. 


Capital  

Reserve  Fund 

Balance  of  Underwriting  Ac-  > 
count  and  Undivided  Profits  j 

Investments 

Interest 

Premiums   .      

Claims 

Expenses 


^^ 
o 

2 

m 

-(J 

l=! 
pl 
O 

o 

o 
c3 


1876. 


£ 
18,000 
18,000 

23,071 

52,391 

2,396 

29,977 

20,700 

6,154 


The  condition  of  thg  old  Insurance  Companies 
conducting  maritime  business  is  not  easy  to  ascer- 
tain. Some  results  may,  however,  be  derived  from  the 
market  value  of  their  shares,  which  for  that  purpose 
are  introduced  in  the  following  table,  all  quotations 
being  taken  on  the  31st  of  December  in  each  year. 


Office. 


Alliance 

Indemnity 

Marine 

Globe 

Home  and  Colonial. 

London 

London  &Provincial 

Merchants' 

Ocean 

Thames  and  Mersey 

Thetis 

Universal 


Paid  up 

Capital. 

1860. 

1865. 

1870. 

1875. 

25 

60 

38 

20 

17 

50 

148 

127 

114 

101 

18 

104 

91 

93 

45 

4 

,   , 

•   • 

,    . 

3 

5 

,    . 

•   • 

4/ 

IVs 

12i 

47 

47 

47 

59 

2 

\Y^ 

2SX 

3 

^'A 

2 

.   . 

10/ 

5 

8H 

243/ 

19 

QVs 

2 

23/ 

SVz 

5/ 

6 

5 

8 

6/3 

7 

. . 

2 

2H 

4:/2 

12 

8H 

150  LONDON   BANKING   LIFE. 

Although  ample  consideration  has  been  given  to 
the  question  of  Marine  Insurance,  few  practical  im- 
provements have  been  attained.  It  has  been  perti- 
nently asked,  "  How  comes  it  that  years  ago  the 
Courts  of  Law  were  familiar  with  Insurance  cases, 
underwriters  disputing  their  liability  on  grounds 
which  appeared  sufficient,  whether  on  the  score  X)f 
unseaworthiness  or  otherwise  ?  "  Such  legal  conten- 
tions are  now  rarely  brought  before  the  public,  nor 
has  satisfactory  proof  been  furnished  that  they  are 
necessary.  Some  of  those  most  interested  in  the 
question  are  in  a  chaotic  condition  of  mind  as  to  how 
they  should  act,  whether  defensively  or  by  complete 
submission  to  injustice  and  spoliation.  It  is  too  pal- 
pable that  there  is  not  only  the  spirit  of  competicion 
for  business,  b'ut  an  actual  thirst  for  precedence  in 
settling  claims,  with  the  avowed  object  of  influencing 
the  action  of  other  underwriters.  This  may  result 
from  the  enormous  growth  of  shipping  and  commerce 
during  the  last  half  century,  but  it  furnishes  no  rea- 
son that  the  so-called  "  freedom  of  contract  "  should 
be  maintained,  nor  that  "honor"  policies  should  be 
issued.  From  the  shameless  claims  and  discreditable 
losses  it  has  become  necessary  to  control  declarations 
of  value,  to  insist  on  proof  of  interest,  to  limit  the 
power  of  insurance,  and  to  conserve  the  property  of 
the  assurers  as  well  as  the  assured.  A  writer  on  the 
subject  has  advanced  the  following  passage  in  a  re- 
cent pamphlet :  "  Granted  that  a  marine  policy 
should  be  simply  a  contract  of  indemnit}^,  the  ques- 
tion arises — To  what  extent  is  an  owner  to  be  in- 
demnified ?     Is  he  to  recover  the  mere  market  value 


SHIPS   AND   MAEINE  INSTJEANCE.  151 

of  his  vessel  at  the  moment  of  her  loss,  which  may- 
take  place  when,  as  at  the  present  time,  the  value  is 
exceptionally  low  ?  "  *     The  answers  surely  are  that 
the  market  value  of  shipping  property  should  alone 
be  taken,  the  average  of  six  or  twelve  months  being 
■'Sufficient  to  guide   impartial   authorities ;    that   the 
'  measures  of  indemnity  "  should  be  the  measures  of 
averages   fair   to    each   party  concerned ;    that   the 
avner  should  not  be  allowed  to  add  to  or  cover  as- 
sumed profits ;    that   he  should   have  co-equal  risks 
wth  those  who  follow  his  engagements ;  and  practi- 
ca  men  will  have  none  of  the  difficulty  described  by 
t]v  writer  in  detailing  the  various  elements,  such  as 
ags   materials,   port   of  construction,  classification, 
naUre  of  employment,  and  state  of  repair. 

?here  is  another  point  in  this  discussion  worthy  of 
conideration,  which  has  been  urged  by  a  well-in- 
forned  authority,  that  the  overtrading  tendencies  of 
the  present  day,  coupled  with  the  pressure  brought 
to  bar  upon  the  British  ship-owner  through  his  un- 
resticted  competition  with  foreign  nations,  are  most 
injuious  to  the  sailors'  interest.  It  is  argued  that 
thos  who  advance  money  upon  vessels  should  do 
so  scely  with  reference  to  the  intrinsic  worth  of  a 
ship,and  not  with  reference  to  the  insured  value. 
That  it  ought  to  be  "  as  easy  to  mortgage  a  ship  as 
it  is  o  mortgage  land "  may  be  an  incontrovertible 
propsition ;  but  it  does  not  follow  that  a  fictitious 
valus  agreed  upon  by  distinct  parties  with  reference 
to  a  pecific  contract  between  themselves,  ought  to 
be  ujheld  in  order  that  advances  may  be  obtained  far 

*  •'  The  Marine  Insurance  Question,"  p.  9. 


152  LONDON   BANKING    LIFE. 

beyond  the  sum  for   which  the  vessel   herself  is  a 
legitimate  security.     Borrowing  within  proper  limits 
would  not  be  affected.     Nor  has  it  been  found  that 
the  rule  of  strict  indemnity,  and  the  necessity  of 
proving  the  amount  of  that  indemnity,  which  holds 
good  on  fire  policies,  has  injuriously  diminished  thf 
power  of  borrowing  on   houses.     Few  things  havJ 
more  to  do  with  ships  being  sent  to  sea  insufficiently 
repaired,  and  insufficiently  provided  with  all  thatis 
requisite   for   their   safety,  than  the   facilities   wih 
which  needy  shipowners  obtain  the  loan  of   capial 
and  enter  upon  adventures  far  beyond  their  meghs. 
Needy  shipowners,  who  purchase  vessels  by  m^ns 
of  money  borrowed  at  ,10  per  cent.,  cannot  be/ex- 
pected to  spend  much  in  making  and  keeping  tteni 
seaworthy.  I 

The  discussions  have  produced  many  valijkble 
opinions,  among  others  that  of  the  late  Mr.  Jifetice 
Willes  on  the  principle  of  valuation  : —  | 

The  legitimate  object  of  the  mercantile  usage  of  vacation 
(which  is  probably  as  old  as  insurance)  appears  to  be  ty)fold. 
First,  the  inconvenience  of  protracted  and  expensive  inuiries 
as  to  value,  which  in  many  cases  would  be  difficult  ofiproof. 
Secondly,  in  the  case  of  ships,  to  allow  the  assured  to  i^ure  to 
the  full  extent  of  his  interest,  though  exceeding  the  inarket 
value,  or  what  he  could  get  for  his  ship  if  put  up  for  saj ;  and, 
after  all,  comes  the  practical  question  whether  the  usefmess  in 
fair  commerce,  as  saving  delay  and  expense  in  allowiiJ!^  a  full 
indemnity  to  the  assured  with  corresponding  remunertion  to 
the  underwriter,  does  not  preponderate,  when  weighecjigainst 
the  possible  hindrance  which  its  abolition  might  in  exqptional 
cases  throw  in  the  way  of  crime.  I 

It  is  asserted  by  some  that  valuation  has  supj-seded 


SHIPS   AND   MARINE   INSURANCE.  153 

the  principle  of  indemnity,  because  it  was  found  to 
be  the  onl}'-  way  to  keep  free  from  contentions  and 
litigation. 

An  illustration  of  the  difficulty  was  given  in   the 
fact  that  "  four  fine  steamers  were  built  costing  30,- 
000^.  each,  and  were  sold  the  following  year  under 
rather  urgent  circumstances,  and  brought  only  14,- 
0001.  each."     And  then  the  inquiries  are  made,  What 
is  the  indemnity  ?     Why  should  the  last  value  and 
not  the  first  be  taken.     Surely  here  again   a  false 
issue  is  raised,  for  had  a  loss  occurred,  the  mean,  or 
average  value,  was  the  amount   to    insure,  and    that 
amount  should  alone  have  been   recoverable.     Had 
the  larger  amount  been  on  the  policy,  injustice  would 
have  occurred,  and  an  undoubted  motive  produced 
for  recklessness,  perhaps  something  worse.     If  it  is 
not  the  duty  of  the  underwriter  to  correct  and  con- 
trol value,    the  duty  should  be  undertaken  by  the 
Legislature  as  well  for  the  sake  of  the  property  as 
for   the   protection  of  those  who   may  be  intrusted 
with  the  management  of  the  property.     Is  it  not  so 
in   mines,  in   factories,  in   dangerous   employments, 
even  in  the  condition  of  houses  that  have   to  be  in- 
habited, or  streets  to  be  traversed  ?     Ignorance,  in- 
capacity,  fraud,    undue    dangers    are  .  all    guarded 
against, — why  not   then   the   perils   of  the   sea,  the 
cupidity    of    shippers,  the    risks    of    ship-owners? 
Granted  that  bad    owners    are  the    exception,    yet 
they  are  like  other  offenders,  the  men  for  whom  laws 
become  necessary,  and  against  whom  society  must  be 
rendered  secure. 

There  is  matter  for  serious  reflection  in  the  fact 


154  LONDON  BANKING  LIFE. 

that  the  greatest  claims  on  Marine  Insurance  Com- 
panies are  made  when  markets  are  depressed,  which 
is  as  notorious  as  regards  cargo  as  it  is  in  respect  to 
hulls.  "  Particular  averages "  figure  almost  as 
heavily  as  the  total  losses,  which  coincidence  is  not 
so  much  traceable  to  seasons  as  to  prices.  There  has 
been  no  abatement  of  heavy  claims  for  three  years 
together,  and  the  questions  may  well  be  raised,  What 
is  the  remedy  ? — who  will  apply  it  ?  It  is  not  suffi- 
cient to  answer  that  the  "  cycle  of  bad  seasons  "  will 
soon  have  run  its  length ;  nor  will  the  assertion  be 
longer  tolerated,  that  a  period  of  "  transition  from 
sail  to  steam  "  is  being  passed  through.  There  is 
abundant  proof  that  science  is  not  wanting,  but  real 
seamanship  is  ;  that  premiums  are  arranged  without 
reference  to  risks,  and  that  competition  has  supplant- 
ed the  "law  of  averages;"  that  combinations  for 
good  results  are  not  even  attempted,  while  the  con- 
nivance of  evil  is  the  only  apparent  evidence  of  vital- 
ity, although  it  has  to  be  deplored  as  the  sign  of  de- 
generacy in  a  profession  that  has  had,  and  still  may 
possess,  the  truest,  ablest,  noblest  men  of  modern 
times. 


CONTINENTAL  TROUBLES.  155 


CHAPTER  XVn. 

CONTINENTAL  TROUBLES. 

*^If  there  were  any  termination  of  England  that  would  be  ever  re- 
membered, ever  honored  in  that  western  world  where  liberty  is  now 
retiring,  conqvest  would  be  more  tolerable,  and  ruin  more  sweet ; 
hut  it  is  doubly  miserable  to  become  slaves  abroad,  because  we  would 
he  tyrants  at  home ;  to  persecute,  when  ice  were  contending  against 
persecution ;  and  to  per/s/i,  because  we  have  raised  up  ivorse  enemies 
within  than  we  are  exposed  to  without,  from  unprincipled  ambition. 
It  is  indeed  a  most  silly  and  affecting  spectacle  to  rage  at  svch  a  mo- 
ment against  our  own  kindred  and  otir  own  blood ;  to  tell  them  they 
cannot  be  honorable  because  they  are  conscientious  in  religion;  to 
stipulate  that  they  must  hold  up  the  right  haiid  in  prayer,  and  not 
the  left ;  and  adore  one  common  God,  by  turning  to  the  east  rather 
than  to  the  west." 

Sydney  Sjuth. 

There  was  no  more  remarkable  financial  event  on 
the  Continent  of  Europe  in  1875  than  the  failure  of 
Baron  Strousberg.  He  was  not  altogether  nnknown 
in  London,  having  been,  as  far  back  as  1850,  a  writer 
for  magazines  and  newspapers.  There  was  a  striking 
fact  that  early  in  life  he  kept  some  small  shop  ;  while 
in  1870  he  rented  a  sumptuous  house  at  the  West 
End ;  then  became  familiarly  known  to  Count  Bis- 
marck, under  whose  patronage  he  went  to  Berlin, 
and  in  that  city  developed  those  financial  schemes 
which  proved  both  his  success  and  his  failure.  In 
Roumania,  he  started  a  net-work  of  railways ;  in 
Hungary,  he  projected  the  North  Eastern  line  ;  in 
Russia,  the  Brest-Grayevo  ;    in  Germany,  the  Halle- 


156  LONDON  BANKING   LIFE. 

Sorau,  the  Hanover-Altenbecken,  and  the  Berlin- 
Posen  lines.  Besides  these,  he  had  acquired  other 
railway  concessions  which  were  to  be  begun  incon- 
tinently ;  he  had  just  established  a  large  engine  man- 
ufactory at  Hanover,  completed  tlie  Berlin  cattle- 
market  and  slaughter-houses,  and  was  increasing  and 
re-organizing  his  ironworks  at  Dortmund  and  Neu- 
stadt,  not  to  speak  of  other  important  factories  on  a 
less  gigantic  scale.  Not  satisfied  with  these  under- 
takings, he  had  purchased  the  southern  citadel  of 
Antwerp,  paying  3,500,000  f.  as  caution-money,  and 
was  prepared  to  cover  the  area  of  the  fortifications 
with  dwelling  houses,  forming  a  new  quarter  of  the 
town.  His  career  has  been  strikingly  portrayed  by 
a  correspondent  of  the  Times  : — 

In  the  midst  of  these  gigantic  speculations  he  was  surprised 
by  the  outbreak  of  the  war  between  Germany  and  France.  The 
blow  thus  inflicted  was  terrible,  and  he  never  recovered  it. 
Exerting  himself  to  the  utmost,  he,  indeed,  succeeded  in  carry- 
ing on  his  railway  lines,  and  before  the  end  of  1870  completed 
the  greater  part  of  the  Roumanian  railway,  as  well  as  parts  of 
the  Halle- Sorau  line  and  the  whole  of  the  Berlin-Posen  line. 
But,  as  the  railway  directors  whose  lines  he  constructed  were 
paying  him  loith  shares,  which,  in  the  financial  depression  caused 
by  the  war  could  only  be  disposed  of  at  a  considerable  loss,  mil- 
lions the  debtor  had  counted  upon  were  never  realized.  Other 
millions  were  lost  by  the  shareholders  of  the  Brest-Grayevo 
line  discontinuing  the  payment  of  instalments.  If  these  acci- 
dents went  far  to  make  a  catastrophe  inevitable,  the  embarrass- 
ments of  the  debtor  reached  an  unmanageable  height  upon  the 
refusal  of  the  Roumanian  Government  to  pay  the  January  in- 
terest of  the  Roumanian  lines  early  in  1871.  The  pros  and  cons 
of  the  question  have  been  so  often  discussed  that  it  would  be 
needless  to  enter  upon  the  merits  of  the  case  ;  but  it  may  be 
mentioned  that  though  Strousberg  held  the  Roumanian  Govern- 


CONTINENTAL   TROUBLES.  167 

ment  responsible  for  the  interest  due,  he,  on  the  refusal  of  the 
Bucharest  authorities  to  pay,  endeavored  to  establish  a  Railway 
Construction  Company,  to  which  he  meant  to  hand  over  the 
greater  part,  of  his  property  and  undertakings,  upon  condition 
of  the  new  concern  advancing  2,000,000  thalers  to  satisfy  the 
claims  of  the  Roumanian  shareholders.  Thanks,  however,  to 
the  long  continuance  of  the  war,  the  projected  company  could 
not  be  established,  and  the  Roumanian  interest  remained  un- 
paid. From  that  moment  the  credit  of  the  debtor,  almost  un- 
limited in  1871,  was  shaken."* 

The  expedients  resorted  to  amidst  these  difficulties 
were  sufficient  to  keep  Strousberg  afloat  for  some 
time  lonsfer.  He  sold  his  extensive  ironworks,  he 
pledged  the  German  estates,  and  mortgaged  other 
property  to  the  Roumanian  Railway  Company.  From 
these  measures  he  raised  700,000  thalers  to  pay  the 
Discount  Company,  and  400,000  thalers  for  the  Rou- 
manian Railway  Company.  Still  anxious  to  sur- 
mount his  difficulties,  he  sold  other  large  and  impor- 
tant properties  ;  yet  he  found  it  impossible  to  carry 
on  his  enormous  railway  unkertakings.  He  there- 
fore abandoned  some,  but  contrived  to  confinue  the 
Brest-Grayevo,  the  Halle-Sorau,  and  the  Hanover- 
Altenbecken.  He  was  then  daring  enough  to  con- 
ceive the  idea  of  recovering  his  Zbirow  estate  by 
purchasing  a  large  railway  carriage  manufactory,  a 
locomotive  manufactory,  a  railway  wheel  manufac- 
tory, a  rolling  mill,  Bessemer  ironworks,  a  number  of 
puddling  furnaces,  blasting  furnaces,  &c.  To  con- 
nect these  various  works  he  laid  down  a  railway 
thirty-five  miles  in  length  on  his  own  property,  and 
built  a  city  for  workmen.     Then  he  endeavored  to 

*  Times,  20th  November,  1875. 


158  LONDON   BANKING   LIFE. 

gain  a  footing  in  England,  but  was  foiled  in  so  doing 
by  having  to  hurry  back  to  Germany  to  meet  new 
financial  difficulties  incurred  from  the  immense  scale 
of  his  Bohemian  works.  The  sale  of  his  famous 
picture  gallery — and  of  the  Antwerp  concession — 
supplied  him  once  more  with  funds.  Then  he  part- 
ed with  the  right  to  finish  the  Hanover-Altenbecken 
Railway  for  a  consideration ;  but  he  contrived  to 
complete  and  open  for  traffic  the  Halle-Sorau  and 
Brest-Gray evo  lines.  In  1874  he  concluded  an  agree- 
ment with  M.  Polykoff,  the  Russian  railway  con- 
tractor, in  which  he  engaged  to  supply  him  with 
2,000  railway  carriages  within  a  very  short  period  of 
time.  To  carry  out  this  contract  he  further  enlarged 
his  Zbirow  manufactory,  and  purchased  another  rail- 
way carriage  manufactory  at  Budna  near  Prague. 
The  carriages  made  under  the  contract  were  destined 
for  the  Kursk-Charkoff  line,  which  paid  the  debtor 
with  debentures,  on  which  the  Moscow  Commercial 
Bank  advanced  the  cash.  Thus  arose  the  connection 
between  the  debtor  and  that  bank.  The  2,000  car- 
riages furnished  and  delivered,  the  debtor  entered 
into  an  agreement  to  supply  2,000  more,  the  Moscow 
Commercial  Bank  advancing  1,800,000  roubles  on  the 
strength  of  this  contract.  Thus  busily  employed, 
Strousberg  bought  back  the  Neustadt  Ironworks  and 
Siegen  mines,  acquired  the  Maria  Ironworks  at  Dant- 
zic,  all  being  greatly  improved  and  enlarged.  He 
likewise  bought  at  St.  Petersburgh  a  railway  carriage 
manufactory,  but  failed  to  get  orders  in  that  city. 

In  1875  the  finale  commenced.     The  shares  of  the 
Mehltheur-Weida    Railway   proved   a   drug   in    the 


CONTINENTAL  TROUBLES.  159 

market ;  then  on  the  Vienna  Exchange  he  was  de- 
feated in  floating  7i  per  cent,  debentures,  and  finally 
the  attempts  to  establish  a  joint-stock  company  for 
his  German  and  Bohemian  mines  and  ironworks  were 
unsuccessful.  Thus  he  attained  the  culminating 
point  in  his  career,  and  in  the  autumn  of  1875  his 
affairs  were  brought  before  the  civil  court  for  admin- 
istration. The  principal  difficulty  of  the  liquidation 
was  in  the  international  character  of  the  bankruptcy, 
and  the  different  legislations  of  the  countries  in- 
volved. Some  advantage,  however,  creditors  might 
hope  to  derive  from  the  Austro-Prussian  Convention 
of  1844,  under  which  German  creditors  might  assert 
their  claims  either  at  Berlin  or  at  Prague,  according 
as  they  thought  fit.  The  Russian  and  English  as- 
pects of  the  case  were  different.  Contrary  to  what 
had  been  stated,  no  real  property  had  been  handed 
over  by  the  debtor  to  his  wife,  excepting  the  Elbing 
Railway  Carriage  manufactory.  Mrs.  Strousberg  had 
at  once  declared  her  willingness  to  yield  up  this  man- 
ufactory to  her  husband's  creditors,  but  its  value  in  a 
bankruptcy  case  was  doubtful.  The  debtor  owned 
in  Germany  the  landed  estates  of  Radawnitz,  Wom- 
wellno,  Alt-Laube,  Priebisch,  Garth,  Lissa,  Peisten, 
Worinen,  Diepensee,  Waldersdorf,  and  Moholz.  In 
addition  to  these  he  owned  a  house  at  Neidenburg, 
and  a  mansion  and  villa,  with  a  good  deal  of  build- 
ing land,  at  Berlin.  The  value  of  his  real  property 
in  Germanywas  officially  estimated  at  16,916,151 
marks;  but  as  the  mortgages  amounted  to  13,818,880 
marks,  the  utmost  of  the  creditors  could  hope  to 
realize  by   sale   was   about  3,000,000  marks.     The 


160  LONDON   BANKING   LITE. 

Neustadt  Ironworks  with  the  landed  estate  of  Xaver- 
lah,  as  well  as  divers  iron  mines  in  the  Siegerland  and 
Harz  and  the  Maria  Ironworks  at  Dantzic,  had  been 
sold  by  the  debtor  to  the  recently  established  company, 
of  which  he  was  the  only  shareholder ;  but  their 
actual  transfer  to  the  company  had  not  yet  been 
made.  The  personal  estate  of  the  debtor  in  Ger- 
many, as  far  as  could  be  seen,  consisted  of  the  fol- 
lowing items  : — 1.  Cash,  22,000  marks  ;  2.  A  share 
in  the  Zoological  Garden  Company  of  750  marks ;  3. 
A  library  estimated  at  60,000  marks ;  4.  Furniture 
in  the  Berlin  mansion,  70,690  marks;  5.  Objects  of 
Art  in  the  Berlin  mansion,  34,000  marks  ;  6.  Cook- 
ing apparatus,  &c.,  10,000  marks.  Adding  to  this 
some  minor  amounts,  they  got  a  total  of  218,565 
marks,  against  "  privileged  claims "  (operatives, 
workmen,  &c.),  reaching  to  122,000  marks.  From  all 
this,  they  could  not  but  arrive  at  the  conclusion  that 
the  liquidation  of  the  case  would  occupy  some  four 
or  five  years,  at  the  end  of  which  creditors  might 
hope  to  receive  a  trifling  fraction  of  their  demands. 
It  might  be  different  were  the  debtor  free,  and  in  a 
position  to  co-operate  with  them  for  the  reconstruc- 
tion of  the  shattered  fabric  before  them.  Their 
special  commissary  had  thought  it  his  primary  duty 
to  do  all  in  his  power  to  obtain  Baron  Strousberg's 
release  from  a  debtor's  prison  in  Russia. 

On  the  23d  of  October  the  Commerce  and  Loan 
Bank  of  Moscow  stopped  payment,  the  cause  appear- 
ing to  be  the  losses  of  the  bank  through  Dr.  Strous- 
berg,  at  that  time  in  Russia.  He  was  arrested  on  the 
25th,  in  St.  Petersburg,  apparently  as  a  debtor  only, 


CONTINENTAL   TROUBLES.  161 

though  criminal  charges  against  some  of  the  directors, 
who  had  also  been  arrested,  were  hinted  at  by  the 
Russian  press,  and  in  private  correspondence. 

Those  who  studied  these  events  knew  that  the 
effect  would  be  very  disastrous  to  the  Western  States 
of  Europe,  because  of  the  poor  communities  in  Russia 
and  Germany,  and  tlieir  inability  to  struggle  against 
adverse  circumstances. 

The  capital  of  the  "  Commercial  and  Loan  Bank  of 
Moscow  "  was  about  400,000^.,  its  liabilities  about 
2,500,000/.  Its  failure  was  sufficient  to  cause  gen- 
eral alarm,  and  a  run  on  other  banks  soon  followed. 
The  Russian  Government,  paternal  in  its  solicitude 
to  allay  apprehension,  sent  a  delegate  from  St.  Peters- 
burg. He  gave  the  assurance  that  the  disaster  had 
arisen  from  exceptional  circumstances ;  assistance 
was  rendered  by  the  State  to  the  other  banks,  and 
the  sense  of  restored  confidence  was  enjoyed  which 
generally  follows  that  kind  of  intervention.  It  has 
been  observed  that,  with  the  recent  expansion  of 
European  trade,  there  has  been  a  considerable  in- 
crease of  banking  accommodation  in  Russia,  over- 
trading had  been  indulged,  and  a  collapse  of  some 
important  interests  was  inevitable. 

Following  the  Moscow  events,  there  were  disturb- 
ances in  St.  Petersburg,  thus  described  in  the  Berlin 
Borsen  Zeitung  of  28th  October  : — 

•''The  failure  of  the  Moscow  Commerce  and  Loan  Bank  has 
given  the  signal  for  a  succession  of  failures  in  the  interior  of 
Russia,  which  affect  St.  Petersburg  but  little,  but  have  com- 
pletely shaken  confidence  in  the  principal  centres  of  trade  in 
Poland,  and  Central  and  Southern  Russia.  This  is  most  direct- 
ly shown  in  the  extensive  notices  to  call  in  the  money  deposited 
with  the  banks.     Particularly  the  branches  of  the  International 

11 


162 


LONDON   BANKING   LIFE. 


Trade  Bank  in  Kiev,  and  the  Warsaw  '  Wechsel  Bank '  have 
been  violently  pressed  for  some  days.  Also  the  bank  of  Azov- 
Don,  in  Taganrog,  and  the  Moscow  Merchants  Bank,  have  had 
to  withstand  a  run  after  the  American  model.  '  The  rate  of 
discount  in  Odessa  is  at  this  moment  12  per  cent.,  and  accord- 
ing to  all  appearance  the  stringency  of  money  will  yet  become 
more  severe  there." 

The  Banking  System  of  Russia  may  be  ascertained 
from  the  following  : — 

Statement  of  the  Liabilities  and  Assets  of  the  Russian  Banks  {exclusive 
of  the  State  Bank),  on  the  13th  of  August,  1873. 

Liabilities. 


Capital 

Reserve 

Deposits 

Current  Accounts     .... 

Brandies 

Correspondents 

Due  to  various  creditors    .    . 

Acceptances 

Interest  and  commission  .  . 
Dividends  payable  .... 
Rediscount  aud  repledgiug  . 
Goods  and  bills  in  commission 
Floating  accounts  .... 
In  transit 


1873. 


£ 

12,775,000 

400,000 

22,015,000 

18,130,000 

1,465,000 

7,095,000 

1,215,000 

1,970,000 

2,270,000 

15,000 

1,810,000 

120,000 

290,000 

670,000 


Total £69,680,000 


Assets. 


Cash 

Balances  of  Bank  at  State  Bank 

Russian  Trade  Bills  discounted  ( with  two  signatures)    . 

Foreign  Bills 

Russian  Bills  (with  one  signature  and  special  guarantee) 

Bills,  Securities,  and  Goods  in  commission 

Advances  repayable  at  call  bearing  interest 

Advances  repayable  at  fixed  dates  bearing  interest    .    . 

Carried  forward 


1873. 


£ 

1,110,000 

9,505,000 

26,370,000 

710,000 

f>45,000 

310,000 

1,550,000 

12,390,000 


£52,890,000 


CONTINENTAL   TROUBLES. 

Assets — continued. 


163 


Brought  forward 

Advances  upon  open  credits 

In  Transit 

Interest  bearing  securities,  tlie  property  of  the  Bank. 

Sums  due  by  brandies 

Debts  due  b}'  correspondents 

Various  debtors 

Cost  of  working 

Protested  bills 

Interest  paid 

Houses,  furniture  of  banks,  &c. 

Floating  accounts,  &c 

Total £ 


187;^. 


£ 

52,890.000 

1,280,000 

40,0  0 

2,990,000 

650,000 

8,930,000 

1,850,000 

330,000 

40,000 

330,000 

240,000 

110,000 


69,680,000 


As  it  is  certain  that  all  rapid  growths  are  full  of 
danger,  so  the  symptoms  that  followed  these  financial 
troubles  have  to  be  closely  watched.  The  evidences 
were  soon  furnished  that  from  over-importing,  losses 
on  manufactures  and  produce  had  to  be  sustained, 
and  contraction  of  trade  became  necessary.  The  de- 
cline in  the  exportation  of  wheat  aggravated  these 
troubles,  and  occasioned  serious  embarrassments.  It 
was  asserted  that  the  country  could  not  afford  its 
export  to  decline  by  tens  of  millions  per  year.  Con- 
sidering that  the  Government  revenue  had  increased 
from  275,000,000  roubles  in  1852  to  559,000,000 
roubles  in  1875,  the  prospect  held  out  by  the  best 
judges  of  losing  160,000,000  roubles  of  foreign  money 
a  year  was  portentous.  Such  an  event  would  serious- 
ly interfere  with  the  progress  of  the  people  ;  it  would 
fetter  the  administration,  and  it  would  either  dimin- 
ish the  fighting  capacities  of  the  Government,  or, 
which  is  much  more  probable,  lead  to  the  doubling 


164:  LONDON   BANKING   LIFE. 

of  the  loans.     The  first  symptoms  of  this  latter  con- 
tingency was  the  resolution  of  the  joint-stock  banks  to 
try  and  contract  a  united  loan  abroad.     There  are, 
moreover,  combinations  that  cannot  be  overlooked  in 
times  so  momentous  to  Russia   with  its  vast   terri- 
tories and  its  82,000,000  of  inhabitants.     "  In  R,ussia," 
remarks  a  most  able  writer,  "  Communism  has  existed 
since  the  earliest  times,  and  we  have  no  experience 
of  the  Russian  peasant  as  an  independent,  self-reliant 
individual.     Many  of  those  best  acquainted  with  him 
apprehend  that  to  make  an  independent  j^roprietor 
of  him  in  his  present  low  state  would  only  aggravate 
matters.     Being  accustomed  to  sell  everything  to  buy 
drink — one-third  of  the  Government  revenue  is  de- 
rived from  that  propensity  of  his — it  is  feared  that  a 
very  large  number  would  sell  their  land  if  they  could, 
and  that  an  army  of  vagabonds  would  be  created  too 
large  to  be  conveniently  dealt  with.     Every  fourth 
day,  moreover,  is  a  holyday ;  and  to  interfere  with 
this  pious  custom  would  hardly  strengthen  that  prim- 
itive faith  to  maintain  which  is  the  dearest  wish  of 
the  Government.     Nor  can  the  peasantry  be  raised 
from  their  degrading  habits  unless  a  little  enlighten- 
ment is  allowed  to  be  propagated  by  schools.     Here, 
too,  ecclesiastical  and  Government  interests  combine 
to  keep  Russia  down.     The  Rayah  subjects  of  the 
Porte  in  1861  had  one  school  for  every  1774  of  their 
suffering  population,  and  one   who  could  read  and 
write  in  every  seventy  inhabitants  ;  in  Russia,  where 
the  Rayahs  are  such  objects  of  pity,  in  the  present 
year,  there  is  only  one  school  to  every  3319  inhabit- 
ants, and  one  scholar  to  every  eighty-one  inhabitants. 


CONTINENTAL   TROUBLES.  165 

It  not  being  very  probable,  in  these  circumstances, 
that  the  undeveloped  Russian  will  be  shortly  enabled 
to  vie  with  the  clever  and  thrifty  American,  some 
Russian  papers  have  actuall}^  raised  the  question 
whether  manufactures  might  not  be  encouraged  if  ag- 
riculture is  becoming  hopeless.'  If  linen  and  tallow, 
if  hemp  and  leather,  can  be  no  more  exported  in 
the  same  quantities  as  formerly,  yet  they  might  be 
sent  across  the  frontier  in  the  shape  of  soap  and  boots, 
of  shirts  and  ropes.  But  here  it  occurs,  even  to  the 
most  Protectionist  Russians,  that  all  attempts  to 
make  their  manufacturers  work  for  the  foreign  market 
are  in  vain  while  they  are  encouraged  by  a  prohib- 
itive tariff  to  turn  out  an  inferior  article  and  charge 
hio-h  for  it.  An  alteration  in  this  would  involve  a 
change  in  the  whole  system  of  Russian  economy,  and 
indirectly  of  Russian  policy.  To  tell  the  Russian  to 
work  for  the  foreigner  is  to  cut  down  the  barrier  that 
has  so  long  separated  him  from  the  rest  of  the  world ; 
is  to  compel  him  to  go  to  school,  and  reform  his 
Church;  is  to  enable  him  to  create  a  middle  class, 
which  would  render  the  maintenance  of  absolute 
despotism  impossible.  No  manufactories,  moreover, 
can  be  effectually  worked  while  the  village  author- 
ities have  the  right  to  forbid  the  members  of  their 
community  to  absent  themselves,  or  while  they  may 
recall  them  at  will  after  leave  given.  But  this  right 
can  be  dispensed  with  only  when  communism  is 
abolished,  and  the  individual  peasant  no  longer  re- 
quired to  work  for  the  parish."* 

There  is  much  that  would  interest  the  student  of 


*  Times,  ITtli  of  Januiiry,  187C. 


166  LONDON   BANKING  LIFE. 

finance  in  other  European  cities ;  but  the  following 
details  must  alone  suffice  : — 

"Denmark. —  Considerable  anxiety  has  for  some 
time  existed  among  the  Danish  commercial  and  in- 
vesting public,  as  it  was  feared  that  the  eifects  of 
over-speculation,  which  in  Germany  has  caused  so 
many  victims,  would  also  be  felt  here ;  and  when, 
some  months  ago,  the  banker,  Baron  Gedahlia,  failed, 
it  was  thought  to  be  but  the  beginning  of  the  end. 
Discount  has  stood  high,  money  has  been  scarce,  and 
some  of  the  more  speculative  shares  have  lately  drop- 
ped considerably.  I  am,  however,  enabled  to  state, 
on  what  I  am  justified  in  calling  the  highest  financial 
authority  here,  that  there  is  no  real  reason  for  the 
alarming  reports  which  have  been  lately  industrious- 
ly circulated.  The  unification  of  the  Swedish  and 
Danish  currency,  which  came  into  force  on  the  first 
of  January  last,  caused  a  great  revolution  in  the 
Scandinavian  commercial  world — the  Swedes,  and 
also  partly  the  Norwegians,  who  formerly  carried  on 
most  of  their  financial  transactions  with  bankers  in 
Hamburg,  having  now  recourse  to  the  Copenhagen 
money  market.  Hence  the  scarcity  of  money  ;  and  it 
is  avowed  that  if  the  managing  directors  of  the  two 
leadino-  banks — the  National  Bank  and  the  Private 
Bank — had  not  taken  timely  precautions,  a  commer- 
cial crash  could  hardly  have  been  avoided.  But 
these  two  banks  alone  have  during  the  last  few 
months  imported  nearly  thirty  million  crowns'  worth 
of  bar  gold  to  meet  the  emergency.  The  great  pres- 
sure on  the  banks  will  be  understood  when  I  state 


CONTINENTAL   TROUBLES.  167 

that  during  the  last  three  months  the  bills  discounted 
by  one  of  these  banks  alone  have  increased  by  nearly 
four  million  crowns.  The  dividends  on  some  of  the 
companies  may  be  less  than  last  year — the  Great 
Northern  Telegraph  Company  suffering,  for  instance, 
from  the  politically  and  commercially  unsettled  state 
of  affairs  in  China  and  Japan ;  but  I  have  every 
reason  confidently  to  assert  that  the  commercial  situa- 
tion in  Denmark,  which  is  of  great  importance  to 
England,  considering  the  comparatively  large  sums 
at  stake,  is  fundamentally  sound."* 

*  Pall  Mall  Gazette,  25th  of  November,  1875. 


168  LONDON  BANKING  LIFE. 


(I 


CHAPTER  XVIII. 

BULLION  MOVEMENTS. 

The  ability,  the  industry,  and  the  strict  uprightness  of  the  great  Isaac 
Newton  sj)eedily  produced  a  complete  involution  throughout  the 
department  which  was  under  his  direction.  The  old  officers  of  the 
Mint  had  thought  it  a  great  feat  to  coin  silver  to  the  amount  of 
fifteen  thousand  pounds  in  a  week.  When  Montague  talked  of 
thirty  or  forty  thousand,  these  men  of  form  and  precedent  pro- 
nounced the  thing  impracticable.  But  the  energy  of  Montague  and  of 
his  friend  Newton  acco^nplished  far  greater  wonders.  Soon  nineteen 
mills  were  going  at  once  inside  the  Tower.  As  fast  as  men  could  be 
trained  to  the  ivork  in  London,  bands  of  them  were  sent  off  to  other 
parts  of  the  kingdom.  Mints  ivere  established  at  Bristol,  Yoi'k, 
Exeter,  Noi-^cich  and  Chester.  This  arrangement  was  in  the  highest 
degree  popndar.  The  machinery  and  the  ivorkmen  icere  welcomed  to 
the  new  stations  with  the  ringing  of  bells  and  the  firing  of  guns.  The 
weekly  issue  increased  to  sixty  thousand  pounds,  to  eighty  thousand, 
to  a  hundred  thousand,  and  at  length  to  a  hundred  and  twenty  thous- 
and. Yet  even  this  issue,  though  great,  not  only  beyond  precedent, 
but  beyond  hope,  ivas  scanty  when  compared  with  the  demands  of  the 
nation. 
"  Some  men,  loho  loved  to  trace  in  the  strangely  complicated  maze  of 
human  affairs,  the  marks  of  jnoi-e  than  human  loisdom,  were  of 
opinion  that,  but  for  the  interference  of  a  gracious  Providence,  the 
plan  so  elaborately  devised  by  great  statesmen  and  great  philosophers 
would  have  failed  completely  and  ignominiously." 

Lord  Macaui.ay. 

The  revolution  in  monetary  science  that  England 
passed  through  in  the  reign  of  William  III.  has  not 
been  sufficiently  studied  in  recent  times.  Its  effects 
may  be  clearly  traced  in  subsequent  history ;  and  its 


BULLION   MOVEMENTS.  169 

advantages   never    better   appreciated   than  in    the 
changes  consequent  on  the  gold  discoveries  in  Cali- 
fornia and  Australia.     These  began  in  1849,  and  the 
coinage  then  in  circulation  was  found  to  be  general- 
ly of  its  intrinsic  metallic  value,  there  being  nothing 
of  importance  to  withdraw,  little  to  clip  or  alter,  ab- 
solutely nothing  to  change  in  nominal  value  or  cur- 
rency.    There  was  not  the  same  results  in  France 
when   the   silver    coinage  was  replaced    with   gold 
Napoleons.     Of  course  a  mighty  movement  of  silver 
was  then  witnessed,  so  much  so  that  the  South  Am- 
erican and  East  Indian  trades  were  greatly  disturbed, 
and  it  was  debated  whether  the  bullion  markets  would 
ever  again  be  perfectly  understood ;  whether  there 
would  not  be  an  inexhaustible  demand  for  that  mar- 
vellous Eastern  Continent  which  fascinates  all  who 
subject  themselves  to  its  influence.     As  in  France, 
so  in  Germany,  with  the  demonetization  of  the  silver 
coinage,  the  commercial  affairs  of  Northern  Europe 
are  confused,  and  many  countries  are  agitated,  dis- 
turbed, and  unsettled. 

It  is  desirable  to  ascertain  the  foundations  on 
which  the  precious  metals  depend.  Statistics  have 
been  produced  of  the  production  of  all  countries  in 
the  world,  from  the  beginning  of  the  sixteenth  cent- 
ury to  the  year  1873,  professing,  however,  only  to  be 
approximately  correct.  In  the  three  centuries  and  a 
half  from  the  year  1500  to  the  end  of  1849  the  total 
production  of  gold  amounted,  in  weight,  to  8,900,- 
000  lbs.  and  in  value  to  420,000,000/.,  sterling.  The 
total  production  of  silver  was  295,000,000  lbs.  or  850,- 
000,000/.  sterling.   Of  the  entire  production  of  the  pre- 


170  LONDON   BANKING    LIFE. 

cious  metals,  gold  constituted  less  than  3  per  cent,  and 
silver  more  than  97  per  cent,  in  weight.  But  gold 
formed  32  per  cent,  and  silver  no  more  than  68  per 
cent,  of  the  value ;  while,  therefore,  the  silver  raised 
out-weighed  the  gold  more  than  thirty-two  times,  in 
value  it  was  worth  little  more  than  twice  as  much. 
From  the  beginning  of  the  recent  gold  discoveries  to 
the  end  of  1873,  the  production  has  reached  9,600,- 
000  lbs.,  or  nearly  three  quarters  of  a  million  pounds 
weight  more  than  was  raised  in  the  preceding  350 
years.  In  value  this  quantity  of  gold  reached  670, 
000,000Z.  sterling.  The  quantity  of  silver  raised  in 
the  same  five  and  twenty  years  is  estimated  at  69,- 
000,000  lbs.,  or  310,000,000^.  sterling  in  value.  In 
this  quarter  of  a  century,  therefore,  gold  constituted 
over  12  per  cent,  of  the  weight,  and  about  68  pei 
cent,  of  the  value.  According  to  this  estimate,  then, 
the  total  production  of  the  precious  metals  in  the 
period  1500-1873  reached  the  sum  of  about  2,900,- 
000,000Z.  sterling,  of  which  total  gold  is  about  1,300,- 
000,000?.  and  silver  is  1,600,000,000?.* 

It  is  surprising  that  by  far  the  greater  part  of  the 
gold  and  silver  productions  has  actually  disappeared 
from  Europe.  Of  course  there  are  large  amounts  in 
the  banks  and  circulating  in  the  several  countries ; 
but  the  aggregate,  after  all,  is  relatively  small.  There 
is  also  a  considerable  quantity  of  gold  and  silver  in  the 
hands  of  the  workers  in  precious  metals,  for  manu- 
facturing into  plate,  jewellery,  and  other  articles. 

In  the  350  years  from  the   beginning   of  the  six- 

*  These  statistics  are  based  on  calculations  made  by  an  able  economist  in 
the  Deutsches  Handelshlatt. 


BULLION   MOVEMENTS.  171 

teenth  to  the  middle  of  the  nineteenth  century,  the 
quantity  of  silver  produced  exceeded  that  of  the  gold 
more  than  thirty-two  times.  As  a  necessary  conse- 
quence, the  value  of  silver  continued  to  decline ;  in 
the  first  half  of  the  sixteenth  century  one  ounce  of 
gold  exchanged  on  an  average  for  llioz.  of  silver ; 
in  the  first  half  of  the  seventeenth  century  it  ex- 
changed for  12i  oz. ;  in  the  first  half  of  the  eighteenth 
for  15  Jq  oz.  ;  and  in  the  first  half  of  the  nineteenth 
for  15  -^-^  oz. ;  in  other  words,  11-25  oz.  of  silver 
were  enough  to  buy  an  ounce  of  gold  when  the  silver 
mines  of  Mexico  and  Peru  were  only  beginning  to 
act  upon  the  markets  of  Europe ;  at  the  end  of  the 
period  it  took  as  much  as  15-65  oz.  of  silver  to  buy 
an  ounce  of  gold.  The  fall  in  the  value  of  silver 
during  the  350  years  was,  therefore,  over  39  per  cent. 
Then  the  gold  mines  of  California  and  Australia 
beo-an  to  coanteract  the  influence  of  the  silver  mines 
of  Mexico  and  Peru.  Gold  fell  in  value,  and  rela- 
tively silver  began  to  rise  ;  the  tendency  was  height- 
ened by  the  demand  which  sprang  up  in  Eastern  Asia 
for  silver — a  demand  increased  by  the  cotton  famine 
that  resulted  from  the  American  civil  war. 

While  the  enormous  wealth  of  the  world  was  not 
only  developed  by  the  gold  discoveries :  but,  by  the 
influences  of  free  trade,  and  the  opening  of  new 
markets  in  the  East,  the  export  of  silver  from  Europe 
to  India  and  China  continued.  In  1857,  the  total 
amounted  to  17,310,090^.,  which  was  three  times  the 
value  exported  in  1854,  and  more  than  five  times  the 
amount  sent  in  1852.  Throughout  this  period  there 
was  generally  an  advancing  rate  of  interest  in  Eng- 


172 


LONDON  BANKING  LITE. 


land,  and  to  justify  such  an  enormous  drain  of  bul- 
lion the  "  balance  of  trade  "  was  adverse  to  England, 
and  exchanges  were  proportionately  unfavorable. 
The  relation  between  the  value  of  money  in  the  East 
and  in  London  is  at  all  times  tolerably  well  defined ; 
and  so  intimate  is  the  connection  between  the  vari- 
ous parts  of  this  great  Empire,  that  it  would  be  next 
to  impossible  for  one  section  to  be  in  adversity  or 
prosperity  without  making  that  condition  felt  at  the 
centre  of  commercial  operations,  and  preserving  that 
harmony  which  distinguishes  great  financial  under- 
takings. Following  the  drain  of  silver  from  Europe 
to  Asia,  the  subsequent  years  may  now  be  detailed. 


Year. 

Exports. 

Year. 

Exports. 

£ 

£ 

1855 

6,431,733 

1866 

2,365.626 

1856 

12,113,991 

1867 

642,912 

1857 

16,731,915 

1868 

1,685,642 

1858 

4,753,933 

1869 

2,362,943 

1859 

14,828,521 

1870 

1,579,473 

1860 

8,478,739 

1871 

3.712,473 

1861 

6,824,807 

1872 

5,654,451 

1862 

10,091,460 

1873 

2.497.676 

1863 

8,263,011 

1874 

7,092,726 

1864 

6  254,004 

1875 

3.714,404 

1865 

3,598,058 

The  great  silver  exports  to  India  and  China  were  re- 
quired to  adjust  the  trade  in  silk,  in  tea,  and  the 
thousand  commodities  imported  into  Europe.  In 
1857,  there  was,  however,  a  remarkable  return  of  coin 
from  the  East,  which,  at  the  time,  created  consider- 
able discussion.  The  question  was  whether  the 
phenomenon  would  continue  ?  Then  it  arose  from 
the  appreciation  of  silver,  which  in  Shanghae  was 
shown  by  the  dollar  fluctuating  between  6s.  l^d.  and 


BULLION   MOVEMENTS.  173 

7s.  bd.  and  the  rupee  in  Calcutta  between  2s.  and  2s. 
2>^d. — differen'ces  representing  a  very  important  per- 
centage.    Now,  was  that  increase  in  the  dollar  or  in 
the  rupee  wholly  justified  ?     To  determine  that  point 
the  trade  to  and  from  the  East  must  be  carefully  re- 
viewed for  the  few  preceding  years.     The  total  ex- 
ports of  British  manufactures  have  to  be  compared 
with  the  imports   of  Chinese  and  Indian  produce; 
and  although  the  statistics  do  not  account  for  the  re- 
markable increase  in  exchanges,  showing  not  much 
beyond  the  usual  proportions  between   exports  and 
imports,  the  latter  greatly  preponderating,  there  were 
special  causes  affecting  certain  articles,  which  acted 
as  an  index  to  the  great  derangement,  in  these  finan- 
cial operations.     Tea  and   silk  were,  of  course,  the 
articles  mainly  concerned.     The  first  showed  the  an- 
omalous feature  of  a  positive  decrease,  there  being 
an  import  of  64,495,297  lbs.  in  1857  against  86,200,- 
414  lbs.  in  1856.     In  silk,  the  raw  and  thrown  to- 
gether, and  the  imports  from  phina,  added  to  those 
from  the  East   Indies,  there  were  7,277,024  lbs.  in 
1856,   and  11,605,441   in   1857.     In   both   of  these 
articles,  however,  as  well  as  with  cotton,  hides,  spices, 
and  other  sundries  imported  from  the  East,  prices  as 
well  as  quantities  have  to  be  taken  into  account  when 
considering  the  bullion  shipments.     Had  the  increase 
occurred  from  simple  causes,  and  the  prices  then  gone 
lower,  or  even  remained  stationary,  there  would  have 
been  no  such  balance  due  to  the  East ;  but  the  fact 
is,  that  ever  since  the  gold  discoveries,  prices  in  Eng- 
land and  throughout  the  world  have  been  continually 
advancing,  until   commercial  crises  occur  and  pro- 


174  LONDON   BANKING   LIFE. 

diice  a  reaction.  Consequently,  the  balances  in  1857 
were  unduly,  magnified,  arguing  upon  merely  ordin- 
ary grounds,  and  great  delusion  existed  in  the  minds 
of  men  of  business  upon  this  point,  and  caused ^uch 
of  the  subsequent  mischief.  *^ 

There  was  a  panic  following  these  events  in  18f 
which  resulted  in  the  usual  collapse  of  produce 
markets,  and  the  withdrawal  of  confidence  in  com- 
mercial circles.  There  can  be  little  doubt  that,  with 
an  abundant  credit,  the  importing  merchants,  par- 
ticularly those  connected  with  the  East,  availed 
themselves  of  every  facility  for  over-trading,  speculat- 
ing upon  a  rising  market,  indulging  in  a  loose  credit, 
and  engaging  in  produce  and  bullion  operations  uf)on 
the  belief  in  constant  improvement  in  prices,  as  well 
as  that  "  game  of  hazard,"  could  be  indefinitel3'-  pro- 
longed. It  can  only  be  upon  these  grounds  that 
stocks  accumulated  to  such  an  extent  as  to  glut  the 
markets,  and  to  cause  that  constant  stagnation  or 
downward  tendency  which  so  often  characterizes 
Mincing  Lane.  Merchants  have  no  right,  especially 
when  trading  upon  credit,  to  "  hold  over;  "  their  duty 
is  to  be  clearing  off  goods  for  new  arrivals,  and  to  be 
simply  anxious  to  realise  the  true  market  value, 
which,  at  one  time  high  and  another  low,  must  bring 
a  correct  average  of  value.  Speculation  in  goods  or 
bills  cannot  be  continued  for  any  long  period,  with- 
out recoiling  on  those  engaged  ;  and  many  instructive 
lessons  could  be  read  if  men  would  wisely  review  the 
experience  of  their  predecessors.  The  undue  ex- 
pansion of  trade  receives  its  best  check  from  the 
absence  of  demand ;  but  with  accumulating  stocks 


BULLION   MOVEMENTS.  175 

and  advancing  prices,  it  is  marvellous  that  merchanta 
and  financiers  can  give  encouragement  to  such  a  trade 
as  is  often  carried  on  by  rash  or  reckless  adventurers. 
Experience  teaches  that  each  age  has  its  victims,  and 
that  less  than  seven  or  ten  years  are  now  required 
to  complete  the  true  cycle  of  trading  absurdities. 

This  was  the  condition  when  the  reshipment  of 
bullion  from  the  East  occurred,  and  the  inquiry  was 
then  natural  whether  bullion  had  been  sent  in  any 
superabundant  quantity  ?  That  some  did  return 
was  the  best  answer  to  the  question.  The  fact  was 
more  prudent  than  the  shipment  of  produce,  and  was 
of  course  consequent  upon  it  becoming  known  in 
China  that  a  great  commercial  crisis  had  occurred  in 
England.  There  was,  however,  an  early  adjustment 
of  aecounts,  which  rendered  any  great  return  of  bul- 
lion unnecessary,  for,  when  shipments  of  produce 
were  resumed  in  the  East,  there  was  no  large  con- 
signment of  silver ;  and  the  corrective  was  early 
supplied.  With  stocks  in  the  produce  market  easing 
off,  confidence  reviving  in  trade,  and  the  continuance 
of  moderate  rates  of  interest,  there  was  a  general 
resumption  of  business,  and  shipments  of  silver  from 
England  continued  to  be  a  prevailing  feature  in  the 
trade  with  the  East. 

It  is  not  necessary  to  detail  any  lengthened  period ; 
but  the  statistics  of  the  bullion  trade  would  show  that, 
from  1860  to  1870,  there  was  no  great  disturbance  to 
the  regular  course  of  business.  The  exports  of  pro- 
duce and  the  imports  of  the  precious  metals  were  in 
concurrent  action ;  the  latter  only  affected  by  the 
great  public  works,  especially  the  extension  of  rail- 


176 


LONDON   BANKING   LIFE. 


roads  throughout  the  vast  districts  of  India,  which 
rendered  necessary  the  substitution  of  "  council 
bills  "  in  order  to  provide  funds  in  England  for  the 
Government  expenditure.  The  only  question  on  the 
minds  of  financiers  familiar  with  metallic  currency 
has  been  whether  it  would  not  have  been  wise  to 
have  introduced  throughout  British  India  a  double 
standard  of  value,  so  as  to  have  utilized  the  gold  dis- 
coveries of  Australia  ?  To  understand  the  importance 
of  these  subjects  the  tabular  statements  on  the  actual 
movements  both  of  bullion  and  Government  paper 
should  be  studied. 

Comparative  statement  of  six  years'  export  of  Bullion  and  Specie — 
gold  and  silver — to  the  East  Indies. 


Shipped  to 

1870. 

1871. 

1872. 

1873. 

1874. 

1875. 

£ 

£ 

£ 

£ 

£ 

£ 

Bombay .    .    . 

497,000 

1,784,325 

3,293,707 

261,530 

3,795,478 

2,008,372 

Madras  .    .    . 

250,025 

305,717 

382,862 

166,160 

169,417 

178,357 

Calcutta .    .    . 

79,012 

875,069 

1,127,040 

313,763 

1,642,269 

531,447 

Singapore  .    . 

548,728 

1,116,713 

1,391,871 

1,747,193 

1,246,996 

896,740 

Total    .    .  £ 

1,374,765 

4,081,824 

6,195,480 

2,518,646 

6,854,160 

3,614,916 

Amount  of  India  Council  Bills  draton  during  last  six  years. 


On 

1870. 

1871. 

1872. 

1873. 

1874. 

1875. 

Bombay .    .    . 
Madras  .    .    . 
Calcatta.    .    . 

£ 

1,102,500 

196,818 
7,619,182 

£ 

1,769,800 

148,600 
7,881,600 

£ 

3,458,400 

272,500 
10,221,600 

£ 
3,017,240 

122,400 

11,695,460 

£ 

2,568,500 

148,900 
8,332,600 

£ 

6,073,800 

347,400 
9,878,800 

Total    .    .  £ 

8,918,500 

9,800,000 

13,952,500 

14,835,100 

11,050,000' 

16,300,000 

It    will  be   seen  that  whenever  there  is  a  great 


BULLION   MOVEMENTS. 


177 


decline  in  the  export  of  the  precious  metals,  there  is 
a  large  increase  in  the  sale  of  Council  Bills,  and  the 
mercantile  classes  have  become  as  familiar  with  their 
value  as  with  that  of  any  commodity  in  the  market. 
There  was  no  interruption  to  this  condition  of  affairs 
until  1875,  when  the  supplies  of  silver  began  to  arrest 
attention,  and  the  value  of  silver  was  necessarily 
affected  by  the  release  of  immense  stores  in  Germany 
and  France. 
The  market  has  shown  the  following  fluctuations : — 


Year. 

Average  Trice. 

Per  oz. 
d. 

1870 

60A 

1871 

60K 

1872 

60^ 

1873 

59  j^: 

• 

1874 

58^ 

1875 

56^ 

Since  the  close  of  1875,  there  have  been  symptoms 
of  a  still  further  decline,  the  average  value  for  the 
first  three  months  of  1876  being  as  follows : — 


Montli 


January 

February 
March 


Average  Price. 


Per  oz. 
d. 
65 

54X 


As  some  vague  speculations  have  been  indulged  as 

to  the  consequences  of  this  depreciation,  it  may  be 

well  to  remember  there  were  kindred  fears  and  alarms 

12 


178  LONDON   BANKING   LIFE. 

when  the  value  of  gold  was  affected  by  the  Califor- 
nian  and  Australian  discoveries.  No  writer  was  then 
more  authoritative  than  M.  Chevalier.  The  transla- 
tion of  his  work  by  Richard  Cobden  contains  the 
following  remarkable  passage  :  "  The  merchant  and 
trader  who  balance  their  transactions  in  two,  or  three, 
or  at  the  utmost  six  months,  would  be  but  slightly 
affected,  in  so  far  as  the  value  of  their  capital  is 
concerned,  by  the  depreciation  of  the  standard  ;  but 
they  would  experience  the  evil  in  another  form.  The 
tendency  to  a  general  rise  of  prices  would  lead  to  an 
expansion  of  credit,  and  an  increase  of  speculation, 
which  would  be  followed  by  panics  and  convulsions 
of  greater  violence  and  more  frequent  recurrence  than 
have  been  hitherto  experienced.  Instead  of  a  crisis 
visiting  the  commercial  world  once  in  each  decade,  its 
return  might  be  expected  every  five  years.  The 
manufacturer  would  probably  find  it  more  difiicult  to 
procure  the  raw  material  of  his  industry  at  remunerat- 
ing prices,  for  speculation  will  always  be  directed  to- 
wards raw  products,  in  preference  to  manufactured 
articles.  This  was  the  case  previous  to  the  late 
panic ;  and  even  at  the  present  moment,  whilst  we 
are  still  in  the  eddy  of  a  crisis,  the  prices  of  raw 
materials  of  our  staple  manufactures  maintain  a  high 
value,  as  compared  with  any  corresponding  previous 
period.  The  very  nature  of  the  trade  created  by  the 
new  gold  mines  is  calculated  to  increase  this  evil ;  for 
it  cannot  be  denied  that  it  is  a  sterile  commerce 
which  yields  neither  raw  material  nor  capital."  Let 
there  be  a  transposition  in  terms  from  gold  to  silver, 
and  the  student  will  have  no  difficulty  in  realizing  the 


BULLION   MOVEMENTS.  179 

consequences  of  a  certain  and  continuous  decline  in 
value. 

There  are,  however,  modifying  or  corrective  cir- 
cumstances to  be  taken  into  consideration.  It  may 
be  that  production  will  not  be  maintained  at  its 
present  rate,  though  authorities  on  the  mineral  capa- 
bilities of  the  Northern  and  Southern  States  of 
America  affirm  that  silver  appears  almost  inexhaust- 
ible. It  may  be  that  the  standard  of  value,  instead  of 
being  fixed  in  some  countries  may  be  mixed,  and 
then  would  arise  some  such  modifications  as  M. 
Chevalier  states  to  have  occurred  in  Europe.  For 
instance,  Belgium  had  no  gold  coinage  until  1847  ; 
then  there  were  25  and  10  franc  j)ieces  coined  to  the 
extent  of  800,000L  ;  the  State  Bank  engaging  to  pay 
the  nominal  value  of  the  gold  pieces  in  silver  cur- 
rency, but  as  it  incurred  no  risk,  the  substitution 
cost  nothing  to  the  government.  When  there  was  a 
similar  movement  in  Holland,  the  gold  coinage 
amounted  to  14,800,000?.,  and  the  two  standards  were 
adjusted,  and  whatever  the  government  withdrew 
from  circulation  was  paid  florin  for  florin.  These  in- 
stances refer  to  the  substitution  of  gold  for  silver  ; 
but  may  there  not  be  similar  causes  to  uphold  the 
value  of  silver  ?  Are  there  not  countries  which  will 
assist  in  regulating  supply  and  demand  ?  Even  while 
the  subject  is  agitating  European  circles,  the  United 
States  government  has  wisely  decreed  that  the 
"  greenbacks  "  shall  be  paid  in  silver,  and  if  cash  pay- 
ments were  resumed  throughout  America,  there 
would  at  once  be  a  means  of  arresting  the  decline.  So, 
too,  if  commerce  became  steady  and  regular  in  the 


180  LONDON   BANKING  LIFE. 

East ;  if  the  huge  populations  of  China  and  Japan 
were  subjected  to  the  habits,  customs  and  practices 
of  civilized  nations  as  regards  metallic  currency,  then 
the  absorption  of  silver  for  coinage  alone  would  soon 
be  manifest.  The  world  is  only  partially  under  the 
influences  of  sound  banking  princi|)les,  and  what  has 
already  been  witnessed  in  the  history  of  a  few  nations 
has  to  be  applied  to  by  far  the  greater  portion  of 
mankind.  When  such  a  result  is  achieved,  these  per- 
turbations will  be  less  marked  than  during  the  last 
few  years  ;  but  revolutions  in  monetary  science 
will  not  cease  to  follow  great  discoveries  of  the  pre- 
cious metals  or  the  substitution  of  one  kind  of 
coinage  for  another.  The  revolution  through 
which  the  world  is  now  passing  in  monetary 
science,  began  in  1852  ;  has  since  then  been 
very  active  both  in  France  and  Germany,  espe- 
cially in  mint  operations  ;  it  is  now  making  itself  felt 
throughout  Asia  ;  will  continue  to  affect  America, 
and  should  especially  be  watched  when  old  civilized 
countries  recommence  cash  payments  for  internal 
purposes,  or  when  semi-barbarous  nations  adopt  .gold 
and  silver,  instead  of  clinging  to  barter  or  a  debased 
currency. 

In  no  previous  stage  of  financial  history  has  there 
been  more  strength  than  at  present  in  the  bullion 
reserves  of  all  European  banks.  It  is  marvellous  that 
the  precious  metals  are  again  being  hoarded  in  super- 
abundant quantities ;  but  from  this  circumstance 
confidence  should  be  imparted  to  trade  and  renewed 
vigor  given  to  the  development  of  the  resources  of  all 
free  countries. 


BULLION  MOVEMENTS. 


181 


As  much  importance  must  attach  to  the  financial 
movements  of  the  principal  European  States,  the 
returns  of  the  Bank  of  France  and  the  Bank  of  Prus- 
sia on  the  31st  of  December,  1875,  are  worthy  of 
attention  : — 


BANK  OF  FRANCE. 

ASSESTS. 


Year. 

Coin  and 
Bullion. 

Discount. 

Loans. 

other 

Assets. 

Total. 

£ 

£ 

£ 

£ 

£ 

18G6 

20,190,000 

23,260,000 

3,490,000 

9,330,000 

56,270,000 

1867 

39,480,000 

21,050,000 

6,160,000 

9,740,000 

76,430,000 

1868 

46,730,000 

19,500,000 

5,420,000 

11,220,000 

82,870,000 

1869 

49,340,000 

24,470,000 

5,l.'i0.000 

10,990,000 

89,930,000 

1870 

33,760,000 

57,820,000 

6,700,000 

12,150,000 

110,430,000 

1871 

25,410,000 

28,120,000 

4,110,000 

66,990,000 

124,630,000 

1872 

31,670,000 

40,420,000 

5,040,000 

64,290,000 

141,420,000 

1873 

29,310,000 

45,480,000 

5,530,000 

61,080,000 

141,400,000 

1874 

52,230,000 

29,120,000 

4,050,000 

45,640,000 

131,040,000 

1875 

&i,390,000 

24,030,000 

3,770,000 

34,950,000 

127,140,000  j 

Liabilities. 

Year. 

Circulation. 

Bank  Post 
Bills. 

Deputies. 

Other 
Liabilities. 

Total, 

£ 

£ 

£ 

£ 

£ 

1866 

38,320,000 

630,000 

17,850,000 

9,710,000 

66,510,000 

1867 

45,710,000 

1,340,000 

19,970,000 

9,410,000 

76,430,000 

18G8 

51^090,000 

1,320  000 

20,410,000 

9,480,000 

82,900,000 

18G9 

54,910,000 

1,950,000 

23,600,000 

9,470,000 

89,930,000 

1870 

69,200,000 

1,930,000 

31,550,000 

7,750,000 

110,430,000 

1871 

91,850,000 

4.30,000 

17,890,000 

14,460,000 

124,630,000 

1872 

105,520,000 

320,000 

23,640,000 

11,940,000 

141,420,000 

1873 

115,350,000 

360,000 

13,410,000 

12,280,000 

141,400,000 

1874 

103,430,000 

430,000 

15,400,000 

11,780,000 

131,040,000 

1875 

96,010,000 

470,000 

18,540,000 

12,130,000 

127,150,000 

182 


LONDON  BANKING  LIFE. 


Year. 


1872 
1873 
1874 

1875 


BANK  OP  PRUSSIA. 


Assets. 


Coiu  and 
Bullion. 


£ 
26,370,000 
34,970,000 
31,370,000 
23,240,000 


Discounts. 

and 
Advances. 


& 
29,040,000 
33,540,000 
23,190,000 
21,980,000 


Liabilities. 


Circulation 


& 
43,510,000 
43,720,000 
41,370,000 
34,230,000 


Deposits. 


£ 
4,160.000 
4,350,000 
5,010,000 
5,290,000 


Acceptances 


& 

3,660,000 

16,200,000 

4,590,000 

1,420,000 


Some  curious  statistics  might  be  gleaned  as  to 
other  State  Banks ;  but  the  periodical  returns  should 
be  studied,  and,  happily,  almost  every  government, 
amenable  to  public  opinion,  publishes  reliable  infor- 
mation.* 


•  Vide  Appendix  E. 


FOREIGN  LOANS.  183 


CHAPTER  XIX. 
FOREIGN  LOANS. 

"  We  are  no  other  than  a  moving  row 
Of  magic  shadow  shapes  that  come  and  go 

Round  icith  the  sun-illumin'd  lantern  held 
In  midnight  hy  the  master  of  the  show. 

"  Impotent  pieces  of  the  game  lie  plays 
Upon  his  chequer-board  of  nights  and  days ; 

Hither  and  thither  moves,  and  checks,  and  slays, 
And  one  by  one  back  in  the  closet  lays. 

"  The  moving  finger  ivrites,  and  having  writ, 
Moves  on ;  nor  all  your  piety  and  wit 

Shall  lure  it  back  to  cancel  half  a  line, 
Nor  all  your  tears  icash  out  a  word  of  it. 

"  Yesterday  this  day' s  madness  did  prepare, 
To-morrow' s  silence,  tritimph,  or  despair." 

From  the  Persian,  by  Edward  Fitzgerald. 

If  a  companion  to  Ward's  admirable  picture  of  the 
"South  Sea  Bubble"  were  to  be  painted,  the  artist 
would  find  studies  suitable  to  his  genius  in  the  vic- 
tims of  recent  Stock  Exchange  transactions.  Not 
only  restless  widows,  credulous  parsons,  and  antique 
spinsters ;  but  grave  men,  suspicious  merchants,  ex- 
perienced gamesters,  would  have  their  features  boldly 
but  truthfully  delineated,  in  order  to  depict  on  can- 
vas the  latest  episode  in  rascality,  baseness  and 
cupidity.  Charles  Dickens  has  narrated  with  fer- 
tilit}^  of  genius,  the  frauds  and  follies  of  the  American 
land-sharks,  the  "  Dismal  Swamp,"  the  miseries  of 
Eden,  and  described  the  glowing  prospects  of  the 


184  LONDON   BANKING   LIFE. 

"  Disinterested  Loan  and  Life  Insurance  Company ; " 
but  he  would  have  had  better  materials  in  the  gross 
delusion  of  the  Honduras  "  Ship  Railway  Loan," 
which  is  unrivalled  for  absurdity  and  charlatanism ; 
or  the  shameless  contracts  of  the  "  Costa  Rica " 
financiers,  who  having  drawn  on  their  imagination 
for  their  facts,  deceived  themselves,  and  then  deter- 
mined to  draw  their  fellow-countrymen  into  their 
disgraceful  schemes.  Even  the  historian  Macaulay, 
whose  charming  style  fascinates  his  readers  into  re- 
garding the  "tulip  mania"  almost  as  a  romance, 
would  have  had  in  the  San  Domingo  Loan  facts  as 
startling,  and  results  as  ruinous  to  those  captivated 
by  the  folly  and  fraud  of  this  century.  That  adven- 
ture embraced  engineers'  and  chemists'  reports  on 
"  forests,  mines,  and  guano  deposits,"  and  although 
the  bonds  were  issued  at  70  they  sooii  fell  in  value 
to  10 ;  the  hypothecated  securities  that  were  never 
worth  anything,  the  special  services  of  the  receiver 
of  "  customs,  royalties,  and  revenues  "  were  never 
required — yet  all  paraded  by  designing  agents, 
brokers,  and  solicitors,  who,  though  possessed  of 
facile  powers  of  persuasion  and  writing,  withdrew 
from  their  occupations,  after  realizing  a  success 
founded  on  their  victims'  resources  being  partially, 
is  not  wholly,  exhausted.' 

It  has  been  reserved  for  the  Select  Committee  on 
Loans  to  Foreign  States,  to  unravel  some  of  these 
mysteries.  From  the  Report,  it  is  evident  that,  while 
the  so  called  "  investors "  have  lost  not  less  than 
798,400?.,  the  promoters  of  the  Honduras,  San 
Domingo,  Costa  Rica,  and  Paraguay  Loans  received 


FOEEIGN   LOANS.  185 

for  their  highly  appreciated  services,  besides  profits 
on  contracts,  an  amount  exceeding  500,000?. !     But 
while   the   labors  of  the   Committee   resulted   in  a 
signal  exposure  of  these  "  financiers,"  they  reported 
they  could  not  avoid  the  conviction  that  the  main 
evils  were  unredressed ;    that  there  were   no   safe- 
guards for  the  public  protection  ;  that  "  the  fatal  in- 
terval between  advertisement  and  allotment  would 
be  fruitful  in  causing  sales  and  purchases  for  the  ex- 
press purpose  of  deceiving  the  public."     There  was  a 
"  charming  simplicity  "  in  the  admission  that  gene- 
rally the  proceeds  of  recent  loans  of  minor  states  had 
been  applied  to    redeeming    former   obligations,   or 
paying  the  interest  due  to  creditors,  and  that  the 
several  "  governments  had  not  only  taken  no  steps 
to  develope  their  resources,  but,  in   some  instances 
the  funds  had  been  shamelessly  misapplied."     There 
was  a  conviction  on  the  mind  of  some  members  of 
the  Committee  that  very  little  can  be  really  done  to 
remedy  the  evils  which,  though  known  to  have  ex- 
isted for  some  time,  have  now  been   more  directly 
exposed  by  the  evidence  adduced  before  the  Com- 
mittee ;  and  they  believed  that  even  for  such  reme- 
dies the  public  must  look  to   the   Stock  Exchange 
rather  than  to  Parliament,      After   the    disclosures 
which  have  been  made  before  the  Committee,  they 
express  the  hope  that  the  Committee  of  the  Stock 
Exchange  will  discover  some  effective  mode  of  deal- 
ing with  the  admitted  evils  of  the  present  system, 
and  of  preventing  wealthy  and  unscrupulous  persons 
from  carrying  out  manoeuvres  which  in  most  cases 
have  ended  in  great  discredit  and  disaster. 


186  LONDON   BANKING   LIFE. 

Had  the  terms  of  other  foreign  Loans  been  exam- 
ined, they  would  have  demonstrated  the  same  lament- 
able results.  For  instance,  Mexico  afforded  an  illus- 
tration of  reckless  gambling  in  1864,  by  the  issue  of 
bonds  at  60  per  cent.,  which  fluctuated  through  the 
influences  of  various  European  Bourses,  until  they 
reached  the  miserable  value  of  Ql  in  1875,  from 
which  there  can  be  little  hope  of  an  improvement. 
But  the  transactions  in  Greek  and  Spanish  Bonds 
also  furnish  proofs  of  disgraceful  proceedings,  reflect- 
ing equally  on  borrower  and  lender,  the  exposure  of 
which  would  prove  either  fraud  or  folly,  or  perhaps 
both.  It  is  almost  an  axiom  that  the  art  of  "  cheat- 
ino-  and  beino;  cheated  "  becomes  an  undoubted  lux- 
ury  to  be  repeated  occasionally,  but  not  to  be  con- 
tinued with  impunity.  Among  a  certain  class  of 
men,  of  assumed  rather  than  of  true  piety,  there  is 
an  eleventh  commandment,  "  Be  sure  you  are  not 
found  out ;  "  and  this  new  law  having  been  broken, 
there  are  as  yet  no  evidences  of  that  absolution 
which  enables  the  race  of  gamblers  to  enter  again 
on  their  career  of  spoliation  and  robbery. 

The  most  remarkable  course  that  England  has 
pursued  in  Foreign  Loans  has  been  in  relation  to 
Turkey.  While  the  Crimean  War  was  largely  the 
parent  of  mischief,  and  caused  an  expenditure  of 
not  less  than  160,000,000?.  of  capital  by  England 
alone,  there  has,  since  then,  been  an  increase  to  the 
public  debt  of  the  Ottoman  Empire  of  185,000,000?. 
To  follow  the  manner  in  which  that  debt  has  been 
funded,  leads  to  the  conviction  that  rapacious  ad- 
venturers, cunning  usurers,  and  designing  syndicates 


FOREIGN   LOANS.  187 

have  successfully  kept  the  falling  exchequer  in  just 
that  condition  of  declared  weakness  or  absolute  in- 
solvency which   might   assist  their   own   base   pur- 
poses.    What    can   the  bondholders   now   think   of 
their  securities  on  the  "  customs  duties   and  octrois 
of  Constantinople  ;  "  on  the  revenues  from  "  tobacco, 
salt,  stamps  and  license  duties,"  not  to  mention  the 
"  general  revenues  of  the   empire  ! "      There   have 
been  on  other  occasions  a  parade  about  the  "  conver- 
sion and  unification  of  the  internal  debts  ;  "  charges 
made  on  the  "  sheep  tax,"  on  the  "  mines  of  Tokat," 
and  finally  on  the  general  revenues,  "  present,  past, 
and  future," — all  phrases  which  have  answered  the 
purpose,  but  the  vocabulary  may  now  be  regarded  as 
exhausted.      The  venality  of  the  "  financiers  "  has 
also  been  exposed  by  the  decree  of  October,  1875, 
which  has  for  its  object  to  "  suppress  "  for  a  period 
of  five  years  half  the  interest  and  sinking  funds  of 
the  interior  and  exterior  debt,  the  annual  service  of 
which  amounts  to  about  14,000,000  Turkish  pounds. 
The  decree  is  "  grandly  imperial,"  framed  in  polished 
language  worthy  of  a  great  cause,  yet  good  plain  English 
would  know  how  to  designate  repudiation.     A  suc- 
cessor to  Sydney  Smith  in  the  art  of  withering  sar- 
casm is  needed  to  ostracise  all  decorated  with  fez  or 
turban,  and  to  expose  the  folly  of  putting  "  faith  in 
princes  "  who  borrow  without  the  means  of  paying, 
who  contract  debts  to  indulge  extravagance  and  fos- 
ter habits  detrimental  to  national  virtue  and  honest 
practices. 

The  condition  of  Egyptian  finances  has  long  at- 
tracted  astute  leaders  of  speculation,  although  it  was 


188  LONDt)N   BANKING   LIFE. 

reserved  to  a  cabinet  of  English  statesmen  to  elevate 
the  subject  into  national  importance,  and  to  make  it 
part  of  a  ministerial  policy  to  the  exclusion  of  meas- 
ures promoting  the  interests  of  the  empire.  It  would 
be  needless  to  lament  that  the  mind  of  the  nation  has 
been  led  captive  ;  but  "  the  plagues  of  Egypt"  never 
excited  more  criticism  than  the  Khedive's  debts  or 
his  personal  interest  in  the  Suez  Canal.  Yet  many 
a  student  of  this  fascinating  subject  may  be  asked, 

"  What  is  he  to  Hecuba,  or  Hecuba  to  him?  " 

Has  there  not  been  a  needless  agitation?  Why  all 
this  exciting  interest  in  a  country  that  has  no  great 
claims  on  the  English  nation  ?  It  is  by  no  means 
large  in  extent ;  is  certainly  unimportant  in  numbers  ; 
which  only  exceed  by  four  times  those  of  London, 
while  its  debt  is  98,000,000?.  with  an  ever-increasing 
deficit,  and  a  mass  of  chaotic  misery  in  bonds,  treas- 
ury notes,  funded  and  unfunded  securities.  When 
the  mysteries  are  unravelled,  it  appears  there  has 
been  an  increase  of  56,000,000Z.  in  eleven  years ;  an 
average  yearly  excess  of  expenditure  over  revenue  of 
about  4,000,000?.,  and,  in  the  language  of  the  Vice- 
roy's apologists,  there  is  "  no  doujit  a  considerable 
margin  of  waste  attaches  to  much  of  this  expendi- 
ture !  "  The  margin  is  absorbed  in  useless  displays, 
gorgeous  festivals,  unproductive  public  works,  facto- 
ries conducted  on  false  principles,  and  a  reckless 
ambition  as  regards  obtaining  and  utilizing  human 
labor.  A  recent  visitor  to  the  country  reports  that 
there  is  not  much  difference  between  "  forced  labor  " 
and  absolute  slavery. 


FOEEIGX  LOA]^.  189 

"  Some  hundreds  of  hands  are  wanted  at  one  of  the  Khedive's 
estates  or  works.  An  order  is  issued  ;  a  steamer  with  soldiers 
on  board  is  sent  up  the  Nile,  towing  several  huge  barges  of 
iron  or  wood.  It  anchors  opposite  a  town  or  village,  and  some 
hundreds  of  men,  boys,  and  girls,  many  of  tender  age,  are  seen 
hurrying  and  being  diiven  down  the  river  bank,  clutching  such 
small  bags  of  bread  or  fragments  of  rusk  as  they  can  collect  in 
haste,  and  accompanied  by  their  parents,  friends,  wives,  and 
children,  who  rend  the  air  with  their  shrill  screams  and  lament- 
ations, for  they  well  know  that  many  a  dear  face  will  never  be 
seen  again.  Neither  the  only  sons  of  widows,  or  of  blind  and 
aged  parents,  nor  the  fathers  of  helpless  infants  are  spared, 
The  despot  requires  them — the  bastinado  and  the  prison  are  the 
cost  of  refusal.  The  whole  crowd  are  rapidly  swept  into  the 
barges,  where,  without  regard  to  age  or  sex,  they  are  packed 
together  like  herrings  in  a  barrel.  The  steamer  and  the  barges 
then  start  with  their  living  freight,  many  of  whom  will  never 
return  to  their  homes  from  the  distant  sugar  or  cotton  estate  to 
which  they  are  conveyed.  During  the  process  of  their  being 
driven  on  board,  and  during  the  voyage,  no  more  account  is 
taken  of  the  occupants  of  the  barges  than  of  brute  beasts. 
Arrived  at  the  scene  of  their  labors,  an  incessant  mill-horse 
grind  of  toil .  ensues.  There  is  no  Friday  rest,  no  moment's 
space  allowed  for  recreation.  Both  sexes  labor  under  the  eye 
of  task-masters  armed  with  sticks,  whips,  konobashes,  which 
are  freely  and  needlessly  applied  to  the  often  naked  and,  at  all 
events,  only  one-shirted  backs  of  these  poor  '  free '  laborers 
whom  the  charity  of  England  has  not  yet  learned  to  pity,  and 
whose  brutal  task-master-in-chief,  she  has  not  yet  learned  to 
condemn.  I  have  myself  seen  little  tender,  emaciated  girls 
staggering  under  heavy  loads  of  earth,  who  have  been  lashed 
each  time  they  ascended  the  high  bank  at  which  they  were  at 
work,  and  even  prodded  in  the  naked  breasts  with  sharp  palm- 
sticks.  I  have  seen  them  sinking  upon  the  earth,  fainting  un- 
der their  loads.  No  sort  of  shelter  is  provided  for  these  unfor- 
tunates, though  the  nights  of  an  Egyptian  winter  can  be  very 
cold,  and  a  single  shirt  is  their  only  garment — many  have  not 
even  this.  On  the  filthy  floor  of  the  sugar  factory,  or  on  the 
bare  stubbly  ground  of  the  cane-field,  where  they  cease  working, 


190  LONDON   BANKING   LIFE. 

there  they  lie  down  to  take  their  scanty  rest,  and  are  succeeded 
on  the  instant  by  other  gangs  awakened  to  relieve  them."  * 

Surely  this  is  not  the  ''  one  Arab  power  to  which 
the  eyes  of  all  friends  of  Africa  naturally  turn  with 
hopefulness  !  "  If  Egypt  has  to  be  made  the  great 
centre  of  African  civilization,  there  must  be  a  great 
clearance  of  much  that  now  prevails  in  the  country. 
The  trading  forces  must  be  re-adjusted  ;  the  finances 
subjected  to  thorough  impl'ovement ;  the  orgies  of 
the  palace  discontinued,  and  the  plundering  habits  of 
certain  functionaries  in  every  town  and  village  be 
extirpated  from  among  the  notorious  vices  of  this 
semi-barbarous  nation.  The  government  can  scarcely, 
indeed,  take  credit  that  "  whatever  may  be  its  defects, 
it  has  shown  that  it  possesses  the  rare  Eastern  merits 
of  intelligence,  vigor,  and  scrupulous  honor  in  meet- 
ing its  engagements.  Breaking  with  old  coubcrvative 
prejudices  and  traditions,  it  has  fully  recognized  the 
advantages  of  modern  progress,  and  in  less  than  a 
generation,  has  revolutionized  the  country  with  rail- 
roads, telegraphs,  canals,  new  methods  of  cultivation, 
schools,  and  most  other  agencies  that  materially  en- 
rich and  civilize  a  nation;  while  the  people  have 
never  failed  the  government,  nor  the  government 
the  public  creditor  in  providing  punctually  for  its 
debts."  t 

This  is  strong  language,  considering  that  the  "  in- 
vesting "  public  have  had  to  endure  some  martyrdom 
since  the  publication  of  Mr.  Stephen  Cave's  Report, 
in  seeing  the  bonds  decline  from  58  to    44;    that 

*  "  Some  Truths  about  Egypt. "  By  Mr.  C  J.  Chester,  in  the  Fortnightly 
Review  of  1st  April,  1876.  ,     ,     .      -^     ^-i 

t  "  The  Finances  of  Egypt,"  published  anonymously,  but  evidently  an  in- 
spired "  production. 


FOREIGI^    LOANS.  191 

"  foreign  capital "  has  not  been  forthcoming  to  dis- 
charge debts,  to  pay  the  interest  due  to  creditors,  or 
to  stimulate  further  "enterprises"  of  a  doubtful 
character.  As  in  the  case  of  the  famous  Ottoman 
decree,  a  circular  to  bankers  and  merchants  has  given 
pointed  significance  to  the  financial  weakness  and 
embarrassment  of  the  "  dependency."  The  informa- 
tion was  thus  given  to  the  public :  "  The  Governor 
of  Alexandria  informs  the  public  that,  as  the  Egypt- 
ian Government  has  not  yet  arranged  the  financial 
combination  intended  to  place  its  debts  upon  a 
regular  footing  {regler  toutes  ses  dettes  (Tune  maniere 
reguliere),  the  Privy  Council,  by  a  decision  approved 
by  His  Highness  the  Khedive,  has  decreed  that  the 
payment  of  bonds  and  orders  to  pay  falling  due 
during  the  months  of  April  and  May  will  be  post- 
poned for  three  months  from  the  date  of  their  ma- 
turity." And  what  is  to  be  the  nature  of  this  "  finan- 
cial combination  ? "  Can  it  be  traced  in  the  lan- 
guage of  ministers,  or  in  the  acts  of  diplomacy? 
Will  a  conference  or  a  council  settle  the  embroil- 
ment ?  It  will  be  obvious  that  difficulties  surround 
the  capitalization  of  a  floating  debt  of  20,000,000?., 
the  consolidation  of  loans  issued  at  tempting  rates, 
varying  between  twenty  per  cent,  and  seven  per 
cent,  per  annum  ;  the  equitable  adjustment  of  taxa- 
tion, and  a  relief  from  that  degree  of  suffering  which 
has  been  described  as  the  "  defects  of  the  system," 
such  as  "ignorance,  waste  and  extravagance,  im- 
mense sums  expended  after  the  manner  of  the  East."  * 
But  will  England  allow  its  statesmen  to  waste  their 

*  Mr.  Cave's  Report  on  the  Finances  of  Egypt. 


192 


LONDON   BANKING   LIFE. 


energies  on  such  an  Augean  stable  ?  There  are  the 
demands  of  home  industries,  the  sanitary  improve- 
ments of  towns  and  villages,  the  claims  of  the  colo- 
nies— all  demanding  prior  consideration.  One  of 
these  subjects  would  alone  be  sufficient  to  absorb  for 
a  time  the  unemployed  talent  or  the  surplus  capital 
of  the  country,  and  it  is  of  essential  importance  tliat 
the  "  drift  of  the  age  "  should  be  wisely  and  properly 
directed. 

The  task  would  be  almost  endless  to  wade  through 
the  history  of  other  loans.  The  spirit  of  George 
Canning  would  have  little  reason  to  boast  over  the 
triumph  of  the  great  statesman  in  having  called  a 
new  world  into  existence,  were  the  miseries  of  the 
South  American  bondholders  fully  understood.  There 
are  the  Bolivian  and  the  Ecuador  Securities,  the 
Paraguayan  and  Venezuelan  Bonds — in  respect  to 
which  absolute  "  repudiation  " — the  annihilator  of 
credit — would  be  preferable  to  the  existence  of 
such  monstrosities !  Taking  that  marvellous  list 
in  the  Times  of  "  Stocks  and  Bonds  in  Default  and 
Shares  paying  no  Dividend,"  it  appears  from  a  care- 
fully compiled  analysis  the  following  losses  have 
been  incurred.* 


Foreign  Stocks 

Foreign  Railways. 
Foreign  Mines,  .. . 
English   Railways. 

Canadian 

American 

Telegraphs , 

Miscellaneous 


Total . 


£104.570,262 

4,043,925 

201,784 

8,403,413 

20,384,767 

24,929,724 

57,068 

8,034,425 


165,625,368 


*  Vide  Appendix  D. 


FOREIGN   LOANS.  193 

It  is,  of  course,  necessary  to  remember  that  this 
capital  has  not  been  wholly  lost  in  England  ;  other 
"  investing  "  states  with  "  more  money  than  wit "  are 
entitled  to  participate  in  the  delusions  and  follies, 
while  there  is  a  portion  of  the  grand  total  "  to  be  re- 
garded as  more  nominal  than  real,  like  the  huge 
figures  that  represent  the  debts  of  all  great  borrow- 
ers." Yet  when  these  deductions  and  allowances 
have  been  made,  what  an  aggregate  remains.  How 
sad  has  been  the  waste !  Had  the  money  been  ex- 
pended on  the  improvement  of  the  human  race,  in 
the  cause  of  education,  in  the  adornment  of  towns, 
in  the  development  of  art,  or  of  new  countries,  then 
there  would  have  been  inestimable  benefits  to  the 
Anglo-Saxon  race,  which  would  have  dominated  over 
waste  lands,  utilized  great  rivers,  produced  materials 
for  the  food,  the  clothing,  the  housing  of  the  great 
human  family. 

Although  certain  magnates  of  the  Stock  Exchange 
are  apologetic  on  the  baseness  of  foreign  loans,  and 
often  exhibit  an  obdurate  infidelity  as  to  there  being 
any  remedies,  it  may  even  now  not  be  too  late  to  ex- 
tract from  the  retrospect  some  comfort  for  the  future. 
For  a  time  there  is  at  least  no  chance  of  promoters 
or  financiers  foisting  trashy  commodities  on  the  English 
market.  No  sensational  writing  either  in  "  dailies 
or  weeklies"  with  "  open  "  advertisements  in  large 
type  to  attract  the  unwary,  will  have  any  effect  on 
the  reading  public.  There  is  a  sense  of  nausea  over 
the  tricks  and  devices  of  "  leading  firms  "  to  deceive, 
entrap,  and  exhaust  the  honest  and  thrifty  of  their 
hard-earned  resources.     The  over-living,  the  effemin- 

13 


194  LONDON  BANKING  LIFE. 

ate  luxury,  the  mendacious  displays  of  modern 
society,  and  many  other  debasing  tendencies,  have 
been  arrested,  their  vagaries  controlled,  and  their 
victims  punished.  Will  the  benefits  be  lasting? 
Much  will,  and  must,  always  depend  on  the  moral  tone, 
the  healthy  vigor,  and  the  recuperative  power  of  the 
age,  which  may  be  gauged  as  much  in  counting- 
houses  as  through  the  press  or  in  the  pulpit.  It  is  to 
be  desired  that  no  scheme  to  withdraw  money  from 
useful  and  productive  enterprises  will  be  encouraged 
until  it  has  been  thoroughly  scrutinized,  and  the  pro- 
moters subjected  to  careful  enquiries  as  to  their 
motives,  objects,  and  means  of  reward.  The  coun- 
tries to  be  entrusted  with  English  capital  should 
be  like  England — free,  liberty-loving,  "  open  and 
above  board,"  with  a  public  exchequer,  a  responsible 
government,  and  accounts  easily  understood,  or  opeu 
to  public  examination. 


I 


REMINISCENCES   OF   MEN   AND   MANNERS.      195 


CHAPTER   XX. 
REMINISCENCES  OF  MEN   AND  MANNERS. 

"Every  man  hath  two  birthdays;  two  days,  at  least,  in  evenj  year,  which 
set  him  npon  revolving  the  lapse  of  time,  as  affecting  his  mortal  dura- 
tion. The  one  is  that  which,  in  an  especial  manner,  he  tei-meth  his. 
In  the  gradual  desuetude  of  old  observances,  this  custom  of  solemniz- 
ing our  proper  birthday  hath  nearly  passed  away ,  or  is  left  to  children, 
who  reflect  nothing  at  all  about  the  matter.  But  the  birth  of  a  Neio 
Year  is  of  an  interest  too  wide  to  he  pretermitted.  No  one  ever  re- 
garded the  first  of  January  with  indifference.  It  is  that  from  which 
all  date  their  time,  and  count  vpon  what  is  left.  It  is  the  nativity  of 
our  common  Adam  ! 

"  Of  all  bells,  the  most  solemn  and  touching  is  the  peal  which  rings  out 
the  Old  Year.  I  never  hear  it  without  the  gathering-up  of  my  mind 
to  a  concentration  of  all  the  images  that  have  been  diffused  over  the 
past  twelvemonth.  It  takes  a  personal  color ;  nor  was  it  a  poetical 
flight  in  a  contemporary,  when  he  exclaimed,  '  I  saw  the  skirts  of  the 
departed  Year.'  It  is  no  more  than  what  in  sober  sadness  everyone 
of  us  seems  to  be  conscious  of,  in  that  avful  leave-taking.  I  am 
sure  I  felt  it,  and  all  felt  it  with  me,  last  night,  though  some  of  my 
companions  affected  rather  to  manifest  an  exhilaration  at  the  birth  of 
the  coming  year,  than  any  venj  tender  regrets  for  the  decease  of  its 
predecessor.  But  I  am  none  of  those  who  '  Welcome  the  coming,  speed 
the  parting  guest.'  " 

Charles  Lamb. 

It  has  been  obvious  throughout  the  recent  crisis  that 
fear  rather  than  reason  has  predominated,  which 
although  not  easily  dealt  with  at  the  time  of  disaster 
or  trouble,  has  a  wonderful  tendency  to  recede,  di- 
minish, and  then  altogether  disappear  !  So  it  has 
been  with  all  previous  periods  of  the  kind,  the  re- 
sults have  been  good  ;  some  combatants  wounded  ;  a 
few  dead  ;  but  the  retrospect  is  not  other  than  bene- 


196  LONDON   BANKING   LIFE. 

ficial.  Tliere  is  reason  enough  to  ponder,  and  per- 
haps, the  best  conclusion  to  arrive  at  is  that  contem- 
poraneous history  can  never  be  well  written,  events 
being  too  near  and  too  fresh  in  the  memory  to  be 
properly  estimated.  But  the  smaller  periodical 
"  scares  "  are  the  offspring  of  timidity,  of  weak  ap- 
prehension, and  of  that  unsubstantial  basis  upon 
which  so  much  of  modern  speculation  is  made  to  de- 
pend. 

The  power  is  given  to  few  men  to  trace  the  crises 
of  nearly  a  quarter  of  a  century,  with  the  tact,  the 
method,  and  the  perseverance  displayed  by  the  late 
David  Morier  Evans.*  Whether  the  close  or  the  be- 
ginning of  another  commercial  revolution  is  now 
being  witnessed,  his  singular  sagacity  in  acquiring 
information  would  have  been  invaluable ;  the  untir- 
ing, plodding,  daily  round  to  ascertain  if  "  there  was 
anything  fresh,"  would  have  brought  out  all  that  was 
obtainable  ;  and  the  result  would  have  been  balance 
sheets  of  failed  firms,  reports  of  meetings  of  creditors, 
the  rumors  of  the  Exchange,  the  gossip  of  Capel 
Court,  with  some  reflections  on  the  solemn  mysteries 
of  Threadneedle  Street.  These  would  all  have  been 
photographed  for  the  journals  he  represented,  or  the 
magazine  he  edited,  although  his  productions  were 
often  brought  out  under  great  difficulty  and  never- 
ceasing  pressure.  He  was  a  link  between  Alsager, 
the  best  of  City  Editors,  and  the  race  of  fertile,  ready 
writers  who  now  follow  the  "  lightning-like "  con- 

*  His  books  on  the  "Commercial  Crisis  of  1847-8  ;""  Coimuercial  Crisis  of 
1857-8,  and  the  Stock  Exchange  Panic  of  1850  ;  "  "  Facts,  Failures,  and  Frauds;" 
are  eminently  worthy  of  reference  on  the  subjects  that  he  knew  so  weU  how 
to  treat. 


EEMIISriSCENCES   OF   MEN   AND   MANNERS.      197 

ducted  intelligence.  Their  work  is  generally  hasty, 
crude,  undigested,  and  fragmentary ;  but  they  assist 
others  to  bring  it  into  form  and  substance ;  the  mar- 
vel being  that  so  much  is  done  daily,  sometimes 
hourly,  to  meet  the  eternal  craving  for  "  news," 
without  caring  to  separate  the  true  from  the  false,  so 
that  a  sensation  is  aroused,  a  speculation  indulged, 
or  currency  given  to  a  scandal.  The  quieter  times  of 
the  ancient  city  may  well  be  recalled — "the  old 
familiar  faces." 

"  How  some  they  have  died,  and  some  they  have  left  me, 
And  some  are  taken  from  me  :  all  are  departed  ; 
All,  all  are  gone,  the  old  familiar  faces ! " 

The  new  race,  whether  bankers,  merchants,  under- 
writers, or  gamesters,  have  to  mould  anew  the 
thoughts  and  actions  of  this  generation  before  there 
can  be  implicit  faith  in  their  doings,  so  dark,  uncer- 
tain, and  dangerous  are  the  combinations  that  prevail 
in  commercial  and  financial  circles.  It  is  natural  to 
inquire,  Cannot  the  press  be  imj)roved?  Are  there 
not  literary  forces  yet  to  be  brought  into  the  service  ? 
Is  it  not  worth  while  to  attempt  something  better 
and  truer  to  the  instincts  of  the  age  than  the  dull 
round  of  small  paragraphs,  copied  from  brokers'  re- 
ports or  compiled  from  official  communications? 

It  is  deplorable  there  is  little  or  no  determined 
resistance  to  the  shameful  speculations  and  the  gross 
competitive  character  of  the  age.  The  tendency  is  not 
after  things  sound,  but  cheap  ;  often  a  hungering  for 
"  sporting  lots,"  not  to  make  "  assurance  doubly 
sure,"  ])ut  to  barter  and  traffic  away  the  vital  prin- 
ciple of  safety,  to  weaken  the   steady   progress   of 


198  LONDON   BANKING   LIFE. 

thrift  and  prudence.  The  old  City  Merchant,  almost 
absorbed  in  his  own  affairs,  who  gloried  in  the  count- 
ing-house and  revelled  in  the  employment  he  was  able 
to  aiford  to  others,  has  nearly  "  passed  away  like  a 
tale  that  is  told."  Where,  too,  are  the  men, — types 
of  the  sedate,  thoughtful,  highly  cultivated  clerks  ? 
How  rare  is  the  broker  who  regards  his  true  mission 
to  be  in  the  "  market,"  not  in  the  club  ;  to  wait  on 
trade  not  to  lead  into  speculations ;  to  be  disinter- 
ested in  his  opinions,  chary  in  his  advice,'prompt  and 
sagacious  in  his  contracts.  It  is  in  no  spirit  of  dis- 
paragement of  the  present  times,  or  vain  reflections 
over  the  distant  past,  that  these  comparisons  are  sug- 
gested. No  doubt  there  is  a  sense  of  rapidity,  an  en- 
largement of  ideas,  a  quickening  impulse  to  be  real- 
ized in  all  that  belongs  to  the  active,  aggressive  ten- 
dencies of  this  age  in  its  commercial  undertakings ; 
but  care  has  to  be  taken  of  the  national  character  ; 
gambling  should  be  discouraged  ;  vice,  extravagance, 
and  meretricious  displays  frowned  out  of  good 
society  ;  the  debased  and  contaminating  features  of 
some  portion  of  the  United  States  utterly  banished 
from  English  circles.  It  may  be  that  the  leaders  of 
commerce  have  themselves  to  reproach  for  some  fol- 
lies now  too  largely  indulged  in  by  the  youthful  por- 
tion of  the  community.  There  has  been  great  sym- 
pathy with  all  kinds  of  sport,  with  amusements  with- 
out taste  or  discretion,  with  folly  that  is  often  "  near 
akin  "  to  vice.  Manly  recreations  and  national  holi- 
days are  not  to  be  discouraged ;  but  let  the  columns 
of  newspapers  be  examined  and  the  result  will  be  a 
greater  preponderance  of  "  intelligence  "  as  to  races, 


REMINISCENCES   OF  MEN  AND  IVIANNERS.      199 

fights,  shows,  great  crimes,  or  reckless  follies  than 
conduces  to  the  public  morals  or  the  improvement  of 
society.* 

It  may  be  that  these  crises  are  traceable  in  some 
respects  to  a  decline  in  national  virtue.  There  would 
be  no  ordinary  advantage  in  calling  in  one  of  the 
prophets,  the  sage  friends  now  advanced  in  years, 
who  are  often  "  very  oracular  "  after  business  hours. 
Many  a  time  have  the  active  men  of  the  day  been  the 
better  to  have  such  spirits  about  them  at  the  close  of 
their  work.  Pleasant  reminiscences  have  been  in- 
dulged in  of  happy  hours  long  since  at  the  "  Cock," 
in  Threadneedle  Street,  or  a  few  minutes  at  "  Gar- 
raway's  "  in  still  earlier  times,  the  latest  news  being 
discussed,  with  great  advantage  to  those  confined  all 
day  to  the  bank  parlor.  The  evening  chat  is  now 
continued  in  other  forms,  the  "  oracle  "  being  mildly 
conscious  that  time  is  more  precious  than  it  was,  and 
that  business  is  necessarily  compressed  into  short 
periods.  Such  a  venerated  friend  has  critically 
watched,  studied  closely,  and  then  corresponded  from 
his  retirement  on  the  events  which  have  been  going 
forward.  He  has  clearly  enough  seen  that  bankers 
and  merchants  have  been  more  frightened  than  hurt ; 
that  there  has  been  a  "  fool's  paradise  "  for  some  to 
dwell  in,  and  that  the  awakening  from  dreams  is  not 

*  The  columns  of  a  daily  newspaper,  have  been  examined  "haphazard." 
The  curions  fact  is  revealed  that  five  columns  of  large  type  are  devoted  to 
korse-racing,  athletic  sports,  boating,  and  football.  This  in  a  journal  con- 
ducted by  leaders  of  Evangelical  religion,  models  of  purity,  the  censors  of 
immoral  tendencies  !  What  shall  be  said,  then,  against  the  daily  and  weekly 
journals  which  devote  the  largest  portion  of  their  space  to  nothing  else  than 
sports  and  amusements,  in  which  it  is  obvious  a  huge  traffic  is  conducted  on 
principles  of  gambling  ? 


200  LONDON   BANKING   LIFE. 

always  a  pleasant  operation  !  But  what  then  ?  A 
crash,  a  convulsion  of  all  things,  blighted  prospects, 
or  a  decadence  of  English  strength  ?  Nothing  of  the 
sort.  Only  a  nine-days'  wonder;  losses  heavy  enough 
to  endure  ;  but  a  wise  investment  for  the  future,  if 
the  lesson  can  be  turned  to  good  account.  The  grave 
spectator  of  passing  events  has  lived  through  many 
a  storm,  and  knows  full  well  that  moderate  views 
come  afterwards  when  bank  rates  are  settled,  when 
trade  revives,  and  when  confidence  is  again  mani- 
fested. His  serenity,  and  that  of  those  like  him,  ex- 
empt from  toil  and  anxiety,  is  quite  refreshing,  as 
they  reflect  on  passing  events,  rich  in  knowledge  of 
the  past  and  foreseeing  the  future  with  tolerable  cer- 
tainty and  distinctness.  None  in  this  position  need 
be  cynical  or  indifferent ;  but  their  experience  should 
remind  those  in  the  daily  struggles  how 

"  Calm  are  we  when  passions  are  no  more  ;  " 

when  the  fluctuations  of  a  troubled  market  can  be 
reduced  to  order  ;  when  all  turmoil  and  excitement 
are  brought  into  harmony  with  those  "  first  prin- 
ciples," which  are  enduring  if  not  eternal. 

The  lessons  of  wisdom  resulting  from  these  reflec- 
tions may  be  glanced  at  as  curious  reminiscences. 
After  one  great  period  of  excitement  it  was  observed 
that  the  citizens  of  London  were  becoming  more  self- 
possessed,  and  resolved  not  to  throw  their  property 
into  the  River  Thames !  Then,  again,  in  pondering 
over  the  mutability  of  all  things  human,  especially 
the  payment  of  a  foreign  coupon,  it  was  thought  that 
it  might  be  the  last  for  which  provision  would  ever 


REMXNilSCENCES   OF   MEN   AND   MANNERS.      201 

be  made  by  that  government.  This  grand  specimen 
of  the  old  school,  has  the  belief  that  there  is  always 
an  avenging  Nemesis,  an  unpropitious  deity,  who 
generally  steps  in  at  a  time  when  he  is  not  wanted. 
As  to  a  certain  king  who  made  trouble  for  himself, 
he  deserved  it  all !  "  What  right  has  he  to  talk  of 
Divine  right  ?  It's  blasphemy !  "  And  it  was  ob- 
served of  his  most  eminent  counsellor  that  it  could 
only  be  said  of  him,  as  the  Romans  used  to  say  to  the 
unfortunate  gladiators — "  Habet !  "  During  the  siege 
of  Paris,  the  same  oracle,  with  a  terrible  outburst  of 
feeling,  was  disgusted  with  the  French  details.  An 
extract  from  Trochu's  speech,  in  which  the  French 
disasters  were  attributed  to  "  English  taxation  and 
Italian  corruption,"  seized  him  with  the  most 
supreme  annoyance,  exclaiming  that  there  should  not 
exist  in  a  civilized  country  a  man  base  and  contempt- 
ible enough  to  give  utterance  to  such  an  accusation. 
The  seeds  of  anarchy,  murder  and  confusion  sown 
broadcast  as  they  were  in  France  must  hereafter  pro- 
duce a  fiendish  crop,  and  lucky  will  England  be  if  she 
escapes  from  the  concomitant  evils  of  democracy, 
socialism,  and  infidelity  !  "  With  the  usual  animos- 
ity of  the  school  to  which  he  belongs — hating  all 
things  foreign — the  dogmatic  statement  was  made 
that  the  French  nation  had  been  a  "colossal  sham" 
ever  since  the  days  of  Adam !  And  then  calmly  re- 
viewing the  perturbations  in  the  rate  of  discount  he 
did  not  anticipate  any  severe  tightness  in  money, — 
the  world  being  overburdened  with  the  precious 
metal,  and  as  commerce  is  now  largely  carried  on  by 


202  LONDON  BANKING  LIFE. 

means  of  the  cable,  coin  is  not  so  much  needed  as  in 
the  early  days  of  this  century  ! 

It  would  not  be  difficult  to  portray  minds  the  re- 
verse of  this  in  its  sympathies  or  antipathies.  There 
has,  however,  been  of  late  an  absence  in  commercial 
circles  of  true  specimens  of  Englishmen.  There  has 
for  the  most  part  been  a  remarkable  tendency  to  re- 
pose faith  in  the  unseen  and  the  untried  ;  a  gulli- 
bility as  to  whatever  is  novel,  out  of  the  way,  or 
even  of  remote  value  or  importance.  These  adven- 
turers are  to  be  met  with  in  most  circles ;  but  they 
abound  in  coffee-houses,  are  often  in  attendance  at 
public  meetings  of  joint-stock  companies,  and  are 
generally  the  centre  of  an  admiring  coterie  of  small 
speculators,  and  perhaps  end  their  career  by  becoming 
members  of  "  syndicates  !  "  They  discharge,  in  fact, 
the  ungenial  service  that  is  described  as  peculiar  to  the 
rear  horse  of  Carting  Lane  in  the  precincts  of  the 
Savoy,  Strand.  "  This  poor  animal  was  trained  to 
go  backwards,  or,  more  properly  speaking,  was  him- 
self dragged  backwards,  down  the  hill.  From  com- 
passion for  the  beast  it  was  suggested  to  the  owners 
that  he  should  have  a  change  in  his  miserable  exist- 
ence ;  but,  strange  to  say,  the  animal  was  utterly 
useless  except  in  his  own  occupation.  From  sheer 
force  of  habit  the  animal  would  only  go  hack^  not 
draw,  contrary  to  the  nature  of  horses.  This  is  a 
fitting  illustration  of  those  human  beings,  who  are 
so  accustomed  to  the  rules  of  contrary  that  they  are 
only  fit  to  hack — to  be  cantankerous,  or  meddle- 
some and  obstructive  members  of  the  legislature,  the 
church,  the  family,  or  society  generall3^     Any  one 


EE]\nNISCENCES   OP  MEN  AND   MANNERS.      203 

may  draw,  but  others  content  themselves  with  re- 
tarding the  too  rapid  progress  of  the  movement."* 

The  same  "  obstructiveness  "  has  long  been  prac- 
tised in  financial  circles ;  stolid  inertness  against 
gigantic  frauds,  a  blind  following  of  the  "  successful " 
classes  ;  and  a  gregarious  sympathy  with  all  that  is 
keen,  sharp,  and  clever  in  the  worst  manner  those 
terms  can  be  applied.  From  such  tendencies  there 
has  sprung  up  a  base  worship  of  Mammon,  which  has 
demoralized  almost  every  class  in  society.  It  is  to 
be  found  in  all  assemblies,  it  aifects  both  sexes,  and 
all  ages ;  it  degrades  to  one  level,  and  brings  all  that 
is  pure,  noble  and  elevating  to  a  common  standard. 
People  are  afraid  to  be  singular  or  stand  alone,  or 
protect  their  own  individuality.  It  has  been  well 
stated  that  "  Gold  is  the  only  power  which  receives 
universal  homage.  It  is  worshipped  in  all  lands 
without  a  single  temple,  and  by  all  classes  without  a 
single  hypocrite :  and  often  has  been  able  to  boast  of 
having  armies  for  its  priesthood,  and  hecatombs  of 
human  victims  for  its  sacrifices.  Where  war  has 
slain  its  thousands,  gain  has  slaughtered  its  millions  ; 
for,  while  the  former  operates  only  with  the  local 
and  fitful  terrors  of  an  earthquake,  the  destructive 
influence  of  the  latter  is  universal  and  unceasing. 
Indeed  war  itself — what  has  it  often  been  but  the 
art  of  gain  practised  on  the  largest  scale  ?  the  covet- 
ousness  of  a  nation,  resolved  on  gain,  impatient  of 
delay,  and  leading  on  its  subjects  to  deeds  of  rapine 
and  blood  ?     Its  history  is  the  history  of  slavery  and 

♦  The  Rev.  Henry  White,  M.A.,  who  gives  this  anecdote  in  a  lecture  on 
"  Habit,"  will  excuse  its  being  applied  to  the  improvement  of  his  fellow 
citizens. 


204  LONDON   BANKING   LIFE. 

oppression  in  all  ages.  For  centuries,  Africa — one 
quarter  of  the  globe — has  been  set  apart  to  supply 
the  monster  with  victims,  thousands  at  a  meal.  And 
at  this  moment  what  a  populous  and  gigantic  empire 
can  it  boast !  The  mine,  with  its  unnatural  drudgery  ; 
the  manufactory,  with  its  swarms  of  squalid  misery ; 
the  plantation,  with  its  imbruted  gangs ;  and  the 
market  and  the  exchange,  with  their  furrowed  and 
careworn  countenances, — these  are  only  specimens  of 
its  more  menial  offices  and  subjects.  Titles  and 
honors  are  among^  its  rewards,  and  thrones  are  at  its 
disposal.  Among  its  councillors  are  kings,  and  many 
of  the  great  and  mighty  of  the  earth  enrolled  among 
its  subjects.  Where  are  the  waters  not  ploughed  by 
its  navies  ?  What  imperial  element  is  not  yoked  to 
its  car  ?  Philosophy  itself  has  become  a  mercenary 
in  its  pay ;  and  science,  a  votary  at  its  shrine,  brings 
all  its  noblest  discoveries  as  offerings  to  its  feet.  What 
part  of  the  globe's  surface  is  not  rapidly  yielding  up 
its  last  stores  of  hidden  treasure  to  the  spirit  of  gain  ? 
or  retains  more  than  a  few  miles  of  unexplored  and 
unvanquished  territory  ?  Scorning  the  childish  dream 
of  the  philosopher's  stone,  it  aspires  to  turn  the  globe 
itself  into  gold."  * 

It  is  not  from  any  assumption  of  the  office  of  the 
"  lay  preacher  "  that  the  moral  is  attempted  to  be 
pointed.  It  may,  however,  be  seriously  urged,  that 
character  in  trade  has  to  be  improved  ;  homely  vir- 
tues respected ;  good  honest  labor  appreciated ; 
moderate  gains  attemj^ted,  and  rash  recklessness  dis- 
couraged.    When  these  are  again  the  rules  of  com- 

*  "Mammon,"  by  Dr.  John  Harris. 


REMINISCENCES   OF   MEN   AND   MANNERS.       205 

mercial  life,  there  Avill  be  less  reproach  against  "  the 
sins  of  the  age,"  as  well  as  a  diminution  of  those 
financial  scandals  that  are  a  disgrace  to  a  city  of  his- 
toric renown,  which  has  justly  prided  itself  on  men 
who  have  achieved  greatness  through  the  counting- 
house,  ascended  the  ladder  of  fame  after  years  of 
toil  in  the  workshop,  or  manufactory.  There  are 
those,  even  now  living,  able  to  redeem  the  City  from 
becoming  a  "  Sahara  "  or  a  "  Cathay,"  a  wilderness 
of  vice,  a  resort  of  tricksters  who  import  habits  and 
practices  hitherto  unknown  in  respectable  society. 
Will  the  future  be  cleansed  of  these  foul,  rank 
abuses?  It  would  be  noble  to  elevate  the  tone,  the 
sentiments,  and  the  atmosphere  of  commercial  life. 
It  is  time  to  have  some  true  "  hero  worship  "  towards 
real  greatness,  it  being  believed  there  have  been  and 
are  men  living  within  the  century  who  deserve  to 
be  remembered  for  their  genius  in  trade,  their  disin- 
terestedness amidst  financial  success,  and  their  no- 
bility in  working,  not  in  a  spirit  of  selfishness,  but 
from  a  desire  to  benefit  their  fellow-countrymen. 
When  these  have  their  reward,  it  will  be  known 
that  the  great  springs  of  commerce  are  working  prop- 
erly, and  that  integrity  of  purpose,  honesty  in  all 
things,  and  well-regulated  enterprises  are  again  being 
developed. 


206 


LONDON   BANKING  LIFE. 


APPENDIX  A. 


List  of  Failures  in  1875. 


NAME. 


Aberdare  and  Plym.  Iron  Co.. 

Adamson  and  Sous,  Hy 

Alilborn,  A 

Alexander,  Son,  and  Co.,  N.. 

Alforth,  C.  E 

Anderson  and  Sous,  J 

"         and  Co.,  John 

"         J.S 

"         P 

Armit,  R.  H 

Aspinall,  Joseph 

Aves  and  Co.,  E.  L 


London . 


T. 


Bagot,  Edward . . 
Barnard  and  Co. 

Barlow,  Bros 

Bartelo,  B.,  von  and  Co. 

Bauni,  Sons,  and  Co 

Baxter,  Albert 

"        John 

Batchelor,  H.  C 

Bell,  J.  H.,and  A 

Benjamin,  M 

Benuet,  Bensen,  and  Co 

Bennet  and  Glave 


Address. 


Glasgow . . . 


Dundee . 
Loudon. 


Swansea 

Manchester  . . 
Crawshawbooth 

Bradford 

London 

Dundee  


Trade. 


Liabili'8. 


Ship  Brokers 

Silk 

East  India 

Timber 

General 

East  India  — 

Manure  Merchant. 

General 

Com.  Agent 

General ■ . . 

Provision 


Benson.  Bobt.,  and  Co 

Berry,  Leech,  and  Co 

Birket,  .lacob • 

Black  and  Co 

Bowes,  Alfred : 

Bowler.  Alfred 

Braudham,  Sam 

Brett,  F.  R 

Brown,  P.,  and  J 

Browu,  Stevens,  Williamson 

Browning,  Francis 

J.  H 

Breslaur,  L 

Brace,  E. ,  and  Co 

Burgess,  Geo.,  and  Co 

Burghardt,  Krenels,  and  Co. 

Busoche,  Em.  de 

Bolton,  Roger,  and  Co 


Dundee. 
London . 


London.. 


Caffala,  S.  G.,  and  Co. 


Glasgow . 


London 


Kildwi.  k. 
Glasgow.. 


London 

Glasgow 

Dundee 

Manchester.. 
Isle  of  Wight. 
Preston.     ... 


London. 


Copper  Smelter 

Warehousemen. .. . 

Cotton  Brokers 

General 

Money  Changers. . . 

Stock  Broker 

Spinner 

Maritime  Agent 

.Jute  Merchants 

General 

Timber 

(  Woollen  Manu-  I 
(     f  acturers ) 

American  Merchants 

Australian 

General 

Shawl  Mai  i  uf  acturers 

General  Merchant. . . 


Wine 

General 

Stuff  Manufacturers, 

Sugar  Brokers 

Oil 


Shipowner 

Wine  Merchant., 
Merchants 


Shipowner . 
Dry  salters  . 


Greek  Merchants. 


£ 
868,000 
100,000 
203,000 
300,000 
95,000 
Not  Stat. 
273,000 
33,000 
80,000 
16,000 
41,000 
17,000 

80,000 
3,500 

8,600 
15,000 
15,000 
30,000 
30,000 
38,000 
80,000 
10,000 
200,000 

46,000 

1,000,000 
35,000 
25,000 
10,000 
35,000 
36,000 
30,000 
63,000 
5,000 
Not  Stat. 

145,0(10 
DO.IMIO 

100,000 
80,0(10 
60,000 
31,000 

180,000 
13,000 

38,000 


Carried  forward  £4,558,100 


APPENDIX  A. 


207 


NAME. 


Caldwell  and  "Watson. . 

Carnie,  Charles 

Chappell,  Joseph 

Chapman,  J 

Chard  and  Co.,  W 

City  and  County  Bank. 


Cohn,  Albert,  and  Co 

Cohen,  Bonus,  and  Co 

Collie,  Alex.,  and  Co 

Cook  and  Co.,  W 

Corkling  and  Co.,  R 

Conyers,  T.  K 

Corry,  Edward 

Coutts  and  Co.,  W    

Craven,  W.J 

Crompton,  Cooke,  and  Co.. 

CunlilTe,  James 

CwillandCo.,D.  Jr 


Da  Costa,  L.  A 

Da  Costa.  Kaalte,  and  Co. 
Davis,  J.,  and  Co 

Dawbarn,  Jas 


De  Negri,  P.,  and  Co 

Digby,  Gaudy,  and  Co 

Druitt,  H.,  and  Co  

Duca,  Paleologo,  and  Sons. 
Dudgeon,  J.  and  W 


Edwards,  C.  S 

Emmens,  Bros 

Eutwisle,  J 

Ewen,  F.  W.,  and  Co. 


Farquhar,  G 

Fearou  and  Co 

Finlay  and  Co.,  J 

Forbes  and  Co 

Fowlie,  J.  C 

Freeth,  Samuel,  and  Co. 
Freeth  and  Whitling  — 
Furniss,  Fredk. 


Address. 


London . 


Bradford. 
Bristol... 
Loudon . . . 


Newcastle.. . 
Manchester. 
London 


Hunslet 

London 

Manchester  . 
London ...  . 
Belfast 


Loudon. 


Birmingham. 
London 


Liverpool . 

tt 
London . . . 


London . 


Manchester . 


Glasgow. 
London . . 
Belfast.. 
Dundee.. 
London . . 


Forthergill,  Hankey,  and  Co 


London. 


Gallatti,  John 

Gardner,  McGregor. 

Geek,  Gustavus 

Geekie  and  Black. . . 


Genl.  South  American  Co. 

Glover,  J.  and  J 

Gompers  and  Marcoss 

•  Gonzales  and  Co.,  A 

Gow,  Brothers,  and  Co ... . 

Gow,  Daniel 

Graham,  John 

Graham,  S.  and  J 


Trade. 


Brought  forward 

East  India  Merchants 

General 

Contractor 

Dyer 

Provision  Merchants 

Bankers 

(  Woollen  Manu-  I 
I     facturers ) 

General  Merchants . . 

East  India 

General 


Liabili's, 


Cloth 

Metal 

TwineManufacturers 
Commission  Agent.. 

Yarn  Dyers 

Commission  Agent. . 
Linen  Merchants .... 


London 

Glasgow 

London 

Cupar  Angus, ) 

N.B I 

London  

Bradford . 

Birmingham . . . 
London 


Merchant . 

Factors 
Coal 


and    Iron ) 

Merchant J 

Commission  Agents., 

Wine  Merchants 

West  India 

General , 

Engineers 


Warehouseman... . 
Financial  Agents. . 
General  Merchant. 


Produce  Broker 

East  India 

General  Merchants. 
Export 


Iron  Founders 

Iron  Manufacturers. 

Contractor 

Iron  Founders 


Greek  Merchant 

Umbrella  Manu-  ) 

f  acturer j 

General  Merchant. . . 


South  American. . . . 

Cotton-Spinners 

Jewelers 

General  Merchants, 
Manufacturers  


Warehouseman . 
Warehousemen . 


£ 

4,558,100 
70,000 
56,000 
27,000 
13,000 
22,000 

Not  Stat. 

120,000 

48,000 

3,400,000 

1,'!,000 

149,000 
9,000 

173,000 
12,000 
17,000 

600,000 
16,000 
50,000 

11,000 

207,000 

18,000 

34,000 

240,000 

2,000 

80,000 

100,000 

100,000 

15,000 
140,000 
100,000 

10,000 


'Large." 
65,000 
35,000 
140,000 
30,000 
31,000 
35,000 

1,000,000 

150,000 
25,000 
15,000 
51,000 

400,000 

8,500 

20,000 

230,000 
23,000 
13,000 
72,000 
72,000 


Carried  forward. .  .£12  85,600 


208 


LONDON   BANKING  LIFE. 


NAME. 


Gray  and  Buchanan — 

Greaves,  G 

Green,  Bros 

Grieves  and  Soveridge. 
Guild,  Alex.,  and  Co  .  . 


Halcomb,  Alex.  J 

Hallett,  Manning  &  Prentis. 

Hare^  Telso  S 

Harris,  JiiUel 

H  assail,  and  McMurdo 

Haj',  Ingram,  and  Co 

Hay,  J.  O.  and  Co 

Heald,  J.,  and  Co 

"      Mathwin,  and  Co 

Henley,  W.  T 

Hewitt,  Ed.,  and  Son 

Hester  and  Co 

Hoffenbacb 

Holland,  R.  L 

Holroyd  and  Co 

Holt,  Kichard 

Humphreys  and  Pearson — 


Ireland,  F.R.  B 

Im  Tliurn,  I.  C,  and  Co. 


Jeffrey,  G.  A 

Jones  and  Co.,  E. 


Kattingell  and  Campbell 

Kilburn,  Kershaw,  and  Co. 

Kimber ,  E 

Kingsford,  Bros 

Knight  and  Sons 

Knox  and  Co.,  J 


Laing  and  Irving 

Lambert,  Bros.,  and  Scott. . 

Laud,  J.  and  E 

Lawton  and  Head 

Leeds  Mercantile  Bank 

Leslie,  Alex. . 
Leslie,  Rivington, 
Leveaux,  Isidor. 


Address. 


Glasgow.. 
Kildwick  . 
Belfast. . . 


Felixstowe. . . 

London 

Liverpool.. .  . 
Birmingham. 
London 


Newcastle. 
London . . . . 


London . 


Bradford  . 
Hull 


London. 


Liverpool. 
London. . . 


London . 


Glasgow  , 


Hawick,, 
London . 


and  Co. 


Lockwood,  D.,  and  W. 


Mabon,  "Walter,  and  Co 

Mackenzie,  B 

Magce,  J.  R. ,  and  Co 

Magill,  Riddell,  and  Co 

Malcolm,  Hudson,  and  Co. . 

Marrell,  Hartley 

Marshall,  "Wm 


Leeds 

London.. . 


Trade. 


Brought  forward. 
Machinist 


Cheesemongers  . . . 
Linen  Manufacturers 


Manufacturer., 


Cotton  Merchant 

General 

Timber 

General 

East  India 

Ship  Brokers 


Telegraph  Engineer. 
Provision  Merchants 

Tea 

General 

Ship  Broker 

Woollen  Merchant, 


Shipbuilders, 


General  Merchant.. 
Merchants 


East  India. 


General 

East  India  Brokers. 

Machinist 

Millers 

Stock  Brokers 

Coal  Merchants 


Liabili's. 


Woollen. 

Coal 

Gun  Manufacturers. 
General  Merchants. . 

Bankers 

E't  India  Merchant .. 


Wine. 


Sl^effield linSacfu^r^r-s^l 

Manchester . 

Dundee 

Belfast 


Mason,  Eadie,  and  Co. 

Mavrocordato,  0.  T. . . 
Mc Arthur  and  Co 


London 

Bradford  . . . 
Manchester. 

Glasgow  . . . . 

London 


Engineers 

Linen  Manufacturers 


Japan  Merchants.. . 

"Worsted 

Merchant 

( "Woollen  Manu- ) 
(     f  acturers j 

Stock  Jobber 

Iron  Founders 


£ 

11,885,600 
30,000 
25,000 
13,000 
28,000 
25,000 

30,000 

170,000 
15,000 
50,000 

150,000 

150,000 
60,000 
51,000 

500,000 
25,000 
Not  Stat. 
10,000 
17,000 
50,000 
50,000 
50,000 

60,000 
3,000,000 

17,000 
120,000 

400,000 

201,000 

Not  Stat. 

38,000 


Not  Stat. 

380.000 
12,000 

100,000 
65,000 
47,000 
47,000 
13,000 

6,000 

30,000 
33,900 
50,000 
59,000 

100,000 
22,000 

100,000 

38,000 

Not  Stat. 
150,000 


Carried  forward   £ 


19,563,500 


APPENDIX  A. 


209 


NAME. 


McArthur,  Wm 

McDonald,  M.,  and  Co 

McFarlane  and  Nance 

McGregor  and  Co.,  R 

McKellar,  Duncan,  and  Co. . 

McLaren,  J.  R ' 

McLay  and  Co. ,  W 

McNair  and  Co.,  J 

Medlock,  Smallware,  and  Co 
Mercan'le  Bank  (J.  Holmes  ) 

and  Co.) ) 

Messulam,  M.  B 

Michaelson,  E.,  and  Co 

Michell,  F 

Miles,  J 

Mills  and  Haywood 

Morlet,  A.  A.  and  Co ... 

Morrison,  John 

"        W.  R.,andCo 

Muirhead  and  Sons 

Munro,  Donald 

Murray,  J.  B 


Niel  and  Shaw 

Neroutsos,  G.  D.,  and  Co. 

Nicholson,  Joseph 

Nixon,  Joseph 


Gates,  George 

Ochsenbein,  C.  E. 


Pamell,W 

Paton,  Cook,  and  Co. .   

Patterson,  H.  P 

Pellatt,  M.  M.,  and  Co 

PellY,  Albert 

Phillips,  E.G 

Phillips  and  Phillips. 

Phillips,  Octavius,  arid  Co. . . 
Phoenix  Bessemer  Steel  Co. 

Preller,  E.,  and  Co  

Pridmore,  W.  Hales 

Priestley,  John 


Raffael,  Bros  

Rainbow,  Holberton,  and  Co 

Rankine,  J.,  and  Co 

Ramsden,  A.  W 

Ramsey.  J.,  Jun 

Richardson  and  Son,  T 

Rix,  J.,  and  N 

Robertson  and  Co.,  J.  P.... 

Roberts,  G 

Rodocanachi,  Bros 

Ronaldson,  J.  J.,  and  Sons.. 

Ross  and  Wood 

Rudall  and  Sons,  J.  H 

Russell,  John 


Address. 


London . . 
Glasgow.. 


London. . . 
Glasgow.,. 
Greenock. 
Glasgow.  . 


Manchester. 

Leeds 

Manchester. 


London . 

a 

Oldham . 
London . 


Dundee. . 
Glasgow. 
Loudon . . 
Glasgow. 


Belfast. . 
London . 


Dewsbury. 
London  .., 


London . . 
Glasgow . 
London. . 


Sheffield 

Bradford 

Birmingham. 
Huddersheld. 

London 


Bingley... 
Bradford. 


London . 


Sheffield. 
London . . 


London . . 
Glasgow . 


Trade. 


Brought  forward . . 

Iron  Founder 

Manufacturers 

Builders 

General  Merchants. 

Warehousemen 

Shipowner 

General  Merchants. 


Bankers  . . . 


General  Merchant.. 

Lead 

Spinners 

General  Merchants . 

Shipowner 

Cotton  Spinners 

Jewellers 

Oil  Refiner 

Yarn  Merchant 


Provision 

General 

Cabinet  Maker.. 
Hosier 


Wool 

Com.  Agent. 


Auctioneer 

Manufacturers.. . . 

Gentleman 

Wine  Merchants. 
General 


Colonial  Brokers 


Silk  

Millowner  , 


Produce 

East  India. ... 

General 

Manufacturer. 


Engineers 

Iron  Merchants 

Yarn  Agents 

Carpet  Manufacturer 
General  Merchants . . 

Wine 

Com.  Agents 

General 

Grain 


Carried  forward,   £ 


Liabili's, 

£ 

19,56.3,500 

263,000 

34,000 

43,000 

36,000 

Not  Stat. 

15,000 

200,000 

Not  Stat. 

65,000 

10,000 

16,000 

Not  Stat. 

72,000 

20,000 

110,000 

200,000 

50,000 

40,000 

10,000 

13,000 

40,000 
30,000 
18,000 
15,000 

12,000 
60,000 

4,000 
60,000 
25,000 

5,000 
12,000 
17,000 
45,000 
46,000 
20,000 
21,000 
34,000 
35,000 

60,000 
61,000 

110,000 
40,000 
15,000 

300,000 
35,000 
19,000 
10,000 
23,000 
80,000 
13,000 

180,000 
60,000 

2,265,500 


14 


210 


LONDON    BANKING   LIFE. 


NAME. 


Sanderson  and  Co 

Scarth  and  Scott 

Schotteld,  Jno.,  and  Co 

Schultz  and  Mohr 

Seffer,  J.  B 

Shand  and  ('o 

Shaw  and  Thomson 

Shaw,  Wm.,  Son,  and  Co.. .. 
Sheridan,  Kemball,  and  Co. . 

Simpson.  J.  and  A 

Sloane,  Kichard 

Smith,  Gilead,  A.,  and  Co. . . 

"        and  Buchanan 

«        J.  W 

»        Edward,  and  Sons. . 


London... 

Leith 

Bradford  . 

London... 

iverpool 

London.  . 


Smyth  and  Co.,  E 

Spotten,  W. ,  and  Co 

Stewart,  Lewis 

Stockton  Hail  Mill  Co. . . 
Strachan  and  Co.,  John. 

"        Hy.S 

Supendin  and  Range 

Siordet  and  Co 


Address. 


Huddersfield. 


London 

Glasgow 

Birmingham. 

London 

Glasgow 

Bingley 

Sheffield 


London . . 

Belfast . . 
London.. 
Stockton. 
London . . 


Trade. 


Brought  forward..., 
Bill  Brokers 


Dyers 

E.  India  Merchants.. 

General 

East  India 

Iron 

( Woollen     Manu- ) 
(     facturers j 

Contractors 

Yarn  Merchants 

Metal  Broker        — 

General  Merchants. .. 

Corn  Factors 

Wool  Comber 

Stockbrokers 

I  Umbrella  Manu-  1 
\     facturers ( 

Linen  Manufacturers 

E.  India  Merchant .. 

Iron  Rails 

E-  India  Merchants. 

Stock  Broker 


London . 


Taylor,  James 

W.  E 

Thompson,  E.,  and  Co 

Thorn,  A.,  and  Co 

Townsend,  W 

Tysoe  and  Sons 

Upton  and  Hussey 

Vasconcellas  and  Co.,  J.  B.. 
Viven  and  Co 

Walker  and  Co : 

•'        and  Simpson 

«        W.,  and  Co 

Warner,  W.  R 

Watt,  J.  H 

Webb.T.  S 

Westbeach,  A.  E.,  and  Co. . . 

Westhead,  J.  P.  and  Co 

Whitlock  and  Dodson 

Wilkinson,  Watts  and  Co. . . 

Williams,  Maurice 

Willis  and  Co.,  John 

Willison  and  Son,  J 

Wilson  and  Co , 

"        R.,  and  Son  

< '        and  Armstrong — 
"        W 

Witt  and  Co.,  G.  A 

Young,  Borthwick,  and  Co. 

Zimmerman,  A.  and  M 


Accrington . 
Loudon 


Salford..., 
London . . . 
LiverpooL 


E.  India  Merchants... 

Shipowner. 

Millowner.. 

Shipowners 

Builders 

Furrier 

Spinners 

Jewellers 

General  Merchants.. 


Liabili'B. 

£ 

22,2a5,500 

7,000,000 

Not  Stat. 

20,000 

300,000 

100,000 

.342,000 

250,000 

30,000 

Not  Stat. 

28,000 

100,000 

600,000 

10,872 

11,000 

300,000 
100,000 
100,000 
200,000* 
80.000 
45,000 
300,000 

253,000 

45,000 

100,000 

150,000 

1,000 

50,000 

32,000 

120,000 


London . . . 
Liverpool . 
London . . . 


Glasgow., 
London . . 


Engineers 

Flour  Merchants. 
Ship  Builders...... 


General  Merchant. . 
Colliery  Proprietor . 
General  Merchants. 


Manchester. 
London 


Liverpool. 
Bradford . 


London 

Newcastle 

London 

Hawick 

(  London and ) 
(   Liverpool.  | 

London 

ILondon 


Wine  Merchants. 

Shipowners 

Cotton  Broker... 
Brassfounders. ... 


33,000 

130,000 

Not  stat. 

50,000 

94,000 

112,000 

200,000 

200,000 

100,000 

26,000 

25,000 

25,000 

100,000 

80,000 

252,000 

48,000 

Merchant 100,000 


Plush  Manufacturers 
Provision  Merchants 
Wool  Merchants. . . 


Bill  Brokers. 
Chemical  . . . . 


Total £ 


2,500,000 
50,000 


37,058,372 


APPENDIX  B. 


211 


APPENDIX  B. 


Stock  Exchange  Curiosities  and  Statistics. 

There  is  a  curious  book  by  John  Freke,  Broker,  entitled  the 
'  Prices  of  the  Public  Stocks,  Securities,  &c.,  Soldhy  the  Author 
at  his  office  over  against  Jonathan's  Coffee  House  iti  Exchange 
Alley.\  The  work  is  worth  consulting  on  the  extent  of  .business 
transacted  in  1715  andl716.  It  was  issued  in  "  leaflets  ;  "  the 
first  and  last  may  thus  be  compared  : — 


East  Indic'i  Stock 
Bank  Stock  .  . 
Soutli  Sea  Stock 
East  India  Bonds 
Lottery  1711 
„  1712  . 
1713      . 


1715. 


10  per  cent.  .  135 

8        „         .  129 

6        „         .    94i 

151.  pm. 

Par  to  2  i)er  cent. 

£2  to  £8 

£2  to  £23 


1716. 


131^ 

102i 

301.pm. 

2  to  l|  pm. 

i  pm. 

£1  to  £15 


There  are  only  ten  stocks  enumerated;  the  whole  list  measures 
7  in.  by  4  in.,  and  is  singularly  compiled  so  as  to  embrace  the 
"  Course  of  Exchange ; "  the  number  of  years'  purchase  that 
annuities  are  worth,  and  the  blanks  and  prizes  in  the  lotteries. 
Each  "  leaflet"  concludes  with  the  announcement  that,  "John 
Freke,  Broker,  at  his  ofiice  in  Exchange  Alley,  buys  and  sells 
stocks,  and  all  public  securities,  and  lends  money  on  the  same. 
Any  gentleman  may  have  this  paper  left  at  his  house  twice  a 
week,  f or  half-a-crown  a  quarter." 


The  Course  of  Exchange  was  originally  established  by  John 
Castaign,  in  the  year  1718,  and  continued  by  the  late  Edward 
Wetenhall  and  his  son  and  successor,  James  Wetenhall,  with 
the  addition  of  the  prices  of  Canals,  Dock  Stocks,  &c.  "Pub- 
lished by  authority  of  the  Committee  of  the  Stock  Exchange  on 


212 


LONDON  BANKING  LIFE. 


Tuesdays  and  Fridays,  by  James  Wetenhall,  Stockbroker, 
Stock  Exchange,  and  7  Capel  Court,  Bartholomew  Lane.  This 
publication  is  punctually  delivered  to  Subscribers,  in  town,  at 
11.  4s.,  per  annum."  The  list  was  printed  by  Maurice,  Printer, 
Howford  Buildings,  Fenchurch  Street,"  on  a  single  sheet, 
worked  on  both  sides,  and  measuring  8  in.  by  13|-  in.  The  follow- 
ing are  the  quotations  of  the  twenty-three  stocks  enumerated: — 


Government  Funds. 

Bank  Stock  Dividends  10  per  ) 
cent ) 

.3  percent.  Reduced  Annuities 

3  per  cent.  Consols  Annuities 
Ditto,  1726 

4  per  cent.  Consols  Annuities 
6  per  cent.  Navy  Annuities 

5  percent.  Annuities,  1797* 
Lonjr  Annuities,  expire  Janu- 
ary, 1860 

Irisli  5  per  cent 

Imperial  3  per  cent.  Annuities 
Ditto  Annuities,  expire  May, 

1819 

Omnium 

India  Stock  Dividends  10^  per 

cent 

South    Sea  Stock  Dividends 

3i  per  cent 

Ditto    Old    Annuities     Divi 

dends  3  per  cent.         .    . 
Ditto    New    Annuities   Divl 

dends  3  per  cent. 
3  per  cent.  Annuities,  1751 
5  per  cent.  India  Bonds 
Excliequer  Bills,  3W.  per  day 
Bank  for  Account,  January  . 

Consols  for  Opening,  Jan.  19 

Omnium  for  paym.  Jan.  15    . 
India  for  opening,  Jan.  23 


1816. 
Jan.  2. 


236  a.  236i 
59|  a  i  a  i 

Shut 

Shut 

74i  a  i  a  i 

92^  a  921 

Notliing  done 

14lf  a  15 

Nothing  done 
Nothing  done 

Nothing  done 

14|  a  141  pm. 

Shut 

Shut 


59i 

Shut 

Shut 

4s.  a  Is.  dis. 

5s.  a  Is.  dis. 

Nothing  done 

611  a  i  a  62  a  615 

14g  a  15i  pm. 
Nothing  done 


1819. 
Dec.  31. 


217J 

67|  a  67  a  I  a  i 

a  I 

Shut 

Shut 

84|  a  I  a  ^  a   |a  J 

Nothing  done 

Nothing  done 

m 

Nothing  done 
655 


Nothing  done 
Shut 

Shut 

Nothing  done 

Shut 

Shut 
Is.  dis.  par.  Is.  pm. 

5s.  a  3s.  dis. 
Nothing  done 

(  68i  a  I  a  f  a  J 
(       a§af a J 


5  per  cent.  Nav}'  as  above  with  the  Dividend  for  the  opening. 


Besides   the   above,    the   list  is   compiled  to  embrace   the 
"Course  of  Exchange,"  price  of  American  Stocks,  English  grain 


APPENDIX   B. 


213 


and  all  information  as  to  Exchequer  Bills  on  the  first  page  ; 
and  on  the  second,  price  of  Canals,  Dock  Stocks,  Water- 
works, the  value  of  Irish  funds,  notices  of  meetings  of  public 
companies,  and  the  price  of  coals. 


Course  of  the  Exchange.  Originally  published  by  John 
Castaign,  was  subsequently  published  by  authority  of  the 
Committee  of  the  Stock  Exchange,  by  James  Wetenhall,  Sworn 
Broker,  on  Tuesdays  and  Fridays,  at  Xo.  1  Copthall  Court, 
Throgmorton  Street,  witli  the  addition  of  the  prices  of  Canals, 
Dock  Stocks,  Assurance  Companies,  &c.,  &c.,  and  may  be  had 
each  day  at  five  o'clock  at  the  printer's,  or  delivered  to  sub- 
scribers the  same  evening,  at  11.  4:S.  per  annum.  A  stamped 
edition  of  this  Paper,  for  circulation  throughout  the  country, 
&c.,  free  of  postage,  is  regularly  published  on  Tuesdays  and 
Fridays,  with  the  unstamped  edition,  the  price  of  which  is  3/. 
per  annum. 

This  list  was  issued  on  a  single  sheet,  printed  on  both  sides, 
and  measured  17  in.  by  10  in.  The  following  are  the  twenty- 
nine  stocks  enumerated,  with  a  comparison  of  quotations: — 


:\ 


Government  Funds. 

Bank  Stock  Dividends  8   pe 

cent      .... 
3  per  cent.  Reduced 
'6  per  cent.  Consols  Annuities 
34  per  cent.  1818       . 
3  per  cent  Annuities,  1726. 
3^  per  cent.  Reduced 
New  4  per  cent.,  witJi   Divi- 1 

(lends  for  opg., 22  January     ) 
New  4  per  cent.,  1826 
Long- Annuities  expire  5th  of  ( 

January, 1860       .         .         .\ 
India  Stock  Dividends  lOJ  per  ) 

cent.  .         .         .         .) 

South  Sea  Stock   Dividends  ) 

3^  per  cent.  .         .         .  \ 

Ditto    Old    Annuities    Divi-  \ 

dends  3  per  cent.  .         .  ( 

Ditto   New    Annuities    Divi-  ) 

dends  3  per  cent.  .         .  ) 

3  per  cent.  Annuities,  1751    . 


1830 
Dec.  31. 


1971 
81ia2a  1^  a 
Shut 

Shut 
902  a  ^  a  f 


99a8| 

Shut 

Shut 

Shut 

Nothing  done 

Shut 
Shut 


214 


LONDON   BANKING   LIFE. 


Government  Funds. 


India  Bonds  4  per  cent. 
Excliequer  Bills  2d.  percent.  ( 
£1,000 ] 

Ditto,  £500     .     .     . 


Ditto,  Small        .     . 
Ditto,  Commercial 
Ditto,  Endorsed 
Ditto,  Advertised  . 
Ditto,  Church     .     . 
Bank  Stock  for  Account 
3  per  cent.     Consols  for    op 

21st  of  January,  1829 
India  Stock  for  opg.,  15th  of 

January,   1S2'J. 
Commissioners  for  the  Reduc- 
tion  of  the  National  Debt, 
purchased  Reduced  at     .     . 
Ditto,  Consols     .... 
Ditto  3^  per  cent.  Consols 

1818 

Ditto,  Siper  cent  Reduced 


1^29. 

Jan.  2. 


68s.  a  69s.  pm. 

67s.  a  70s.  a  G9s. 

pm. 

68s.  a  70s.  pm. 

68s.  a  70s.  pm. 

Nothing  done 

Nothing  done 

Nothing  done 

Nothing  done 

Nothing  done 


571  a 


Nothing  done 
86i 


»og 

95g 


1830. 
Dec.  31. 


8s.  pm. 
19s.  a  17s.  a  18s. 

a  16  pm. 
(  19s.  a  17s.  a  18s. 
(  a  16s.  pm. 

j  19s.  </  17s.  a  18s. 
(       a  16s.  pm. 
Nothing  done 

Nothing  done 

Nothing  done 
f82irti«t  a  I 

Nothing  done 


81i 
901 


The  amount  of  Sterling  Money  to  be  invested  by  the  Commission- 
ers for  the  Reduction  of  the  National  Debt,  for  the  quarter  from  the 
10th  of  October,  1828,  to  the  5th  of  January,  1829,  is  14,188Z.  Is.  Qd, 
daily,  which  in  the  quarter  will  amount  to  595,899/.  5s.  Id.  For  the 
quarter  from  the  11th  of  October,  1830,  to  the  5th  of  January,  1881, 
12,290/.  daily,  wliich  in  tlie  quarter  will  amount  to  577,654/.  9s.  \ld. 

The  list  is  compiled  to  embrace  prices  of  Foreign  Stocks, 
prices  of  coals  in  the  Pool,  Irish  Funds,  arrivals  of  grain,  and 
the  days  of  opening  and  closing  Transfer  Books,  on  the  first 
page,  and  on  the  second  page  the  latest  price,  dividends,  and 
number  of  shares  of  all  companies,  and  also  list  of  Scottish 
companies'  prices.  The  list  was  printed  by  "  Anne  Maurice, 
printer,  Fenchurch  Street." 


The  Stock  Exchange  List  of  1876  now  embraces  Stock,  Bonds 
and  Shares,  of  the  nominal  value  of  3,135,000,000/.  (  excluding 
British  and  Indian  Stocks),  and  if  the  various  columns  were  in 
one  length  the  whole  would  cover  a  space  of  4i  yards  !  ! 


APPENDIX  C. 


215 


I— ( 


00 

w 

O 

M 

H 

o 


rr 

tn 

H 

U 

W 

H 

cc 

H 

<1 

cc 

0 

u 

H 

P 


1,851,840,913 
1,913,239,201 

-=1  S 

.830,936,612 
840,584,198 

Deduct 

from 

Treasurer 

other  than 

6  per  cent- 

fund. 

3,274,873 

Bills  of 
other 
Banks. 

23,527,991 
24,261,961 

Pre- 
miums. 

8,563,262 
8,742,393 

Premises 

and 
Furniture. 

37,270,876 
40,968,755 

United 

States 

Bonds. 

25,347,100 
26,897,150 

Co   03 

926,195,072 
968,509,871 

S3 

1874 
1875 

o 
H 


O  d 


eo 
o 


Oi 

eo 

OS 

t- 

CO 

00 

00 

00 

n^   CO      . 
03   5    <U 


n  CD 

00  t- 

C5  O 


2    2!^ 


CO 

05 

V 

-M 

C£> 

O 

p4 

-1 

i 

O) 

CD 

ft 

05 

CO 

C 

•* 

o 

CD 

"3 

^g 

S 

Oi 

00 

CO 

Q 

CO 

CO 

»H 

to 

04 

t- 

t;- 

00 

oo 

H 

rH 

rH 

=4« 

o 

.a 

s- 


216 


LONDON    BANKING    LIFE. 


APPENDIX  D. 


Analysis  of  Stocks  in  Default. 

foreign  stocks. 


Name. 


Bolivia  6  per  cent.     . 
Costa  Rica  6  per  cent. 

Ditto      7  per  cent. 
Ecuador  1  per  cent  (nom) 
Greek,  5  per  cent.  .     . 
Honduras  10  per  cent. 

Ditto    10  per  cent. 
Mexican  3  per  cent.     . 

Ditto  8  percent.     . 
Paraguay  8  per  cent.  . 

Ditto    8  per  cent.  . 
San  Domingo  6  per  cent 
Spanish  3  per  cent.     . 
Venezuela  3  per  cent. 

Ditto     1^  per  cent. 

Ditto    6   per  cent. 

Ditto    6  per  cent. 


Louisiana  Levee  8  per  ct. 

Ditto      6  per  cent. 

Virginia  Stock  6  percent. 

Total    .    .    i 


Amount  of 

Issue. 


£ 

1,700,000 

500,000 

2,400,000 

1,825,000 

2,800,000 

90,000 

2,500,000 

10,241,650 

4,864,800 

1,000,000 

2,000,000 

757,700 

161,105,000 

2,809,100 

1,888,800 

1,000,000 

1,500,000 


198,482,050 

600,000 

800,000 

6,400,000 


206,282,050 


Price. 


68 

72 
82 

59 
80 
80 

60 
80 
85 
70 
80 


63 
60 


75 
103 
103 


Price. 
1876. 


21 
13 

9 

8 
15 

4 

4 

8S 

6 

9 

9 
10 
17 

7 

4 

9 

9 


45 

45 
40 


Depreciation. 


£ 

799,000 

295,0(J0 

1,752,000 

1,432,000 

694,000 

1,900,000 

2,626,992 
710,000 

1,520,000 

474,620 

85,385,650 


540,000 
765,000 


99,894,262 

180,000 

464,000 

4,032,000 


104,570,262 


fOREIGN   RAILWAYS. 


Name. 

Amount  of 
Issue. 

Price. 

Price . 
1876. 

Depreciation. 

Mexican 

Royal  Sardinian     .     .     . 
Royal  Swedish  .... 
Ditto         7  per  cent. 
Smyrna  and  Cassada.    . 
Varna 

£ 
2,299,801 
400,000 
450,000 
160,000 
414,160 
900,000 

20 
10 
5 
4 
20 
20 

li 
li 

.1 

10 

£ 

£ 
2,155,595 
340,000 
438.750 
70,000 
207,080 
832,500 

Total     .    .     £ 

4,623,461 

4,043,925 

APPENDIX  D. 


217 


FOREIGN   MINES. 


Name. 

Amount  of 
Shares. 

Price. 

Price. 
1876. 

Depreciation. 

Eberhardt 

25,223 

10 

Bdis 

£ 
201,784 

ENGLISH    RAILWAYS. 


Name. 

Amount  of 
Issue. 

Price. 

Price. 
18T6. 

Depreciation. 

Cornwall 

East  London 

London,   Chatham    and  | 

Dover ( 

Metropolitan 

Waterford  and  Central  1 

Ireland J 

28,773 
400,000 

9,646,038 

2,250,000 

250,000 

20 

Stock. 

Total. 

5 
30 

20 

43 

15 

£ 

£ 

21,582 
170,000 

7,716,831 

1,282,500 

212,500 

8.403,413 

CANADIAN    RAILWAYS. 


Name. 

Amount  of 
Issue. 

Price. 

Price. 
1876. 

Depreciation. 

Canadian  Sd.  7  per  cent. 

Grand  Trunk     .... 

Ditto    2nd  Pref.  Stk. 

Ditto     3rd        Ditto. 

Gt.  West,  of  Canada  .     . 

Ditto            5  per  ) 

cent.  pf.  con.  80.     .     .  f 

Mid.  of  Can.  6  per  cent.  . 

£ 

200,000 

10,295,144 

2.327,808 

7,166,911 

4,459,330 

227,660 

335,000 

100 
100 
100 
100 

20i 

100 
100 

58 
10 
34 

15 

6i 

57 
50 

£ 

£ 

84.000 
9,285,630 
1,536,348 
6,091,875 
8,121,525 

97,889 

167,500 

Total     .     .     .     £ 

25,011.853 

20.384.767 

218 


LONDON   BANKING   LIFE. 


AMERICAN    RAILWAYS. 


Name. 

Amount  of 
Issue. 

Price. 

Price. 

1876. 

Depreciation. 

At.  and  G.  W.  1  Mort.  7  1 

per  cent ( 

At.  and  G.  W.  2  Mort.  7  1 

per  cent J 

At.  and  G.  W.  3  Mort.  7 : 

per  cent : 

Detroit  and   Milvvaukie  / 

1st  Mort.  7  per  cent  .  ) 
Detroit   and  Milwaukie  ) 

2nd  Mort.  8   per  cent.  ) 

Erie  $100 

Erie  pref 

Mis.  Can.,  &c.  1st  Mort.  . 
At.   C.   &  G.   W.   Con.  I 

Mort.,   &c ( 

$ 
17,500,000 

11,500,000 

29,000,000 

2,500,000 

1,000,000 

78,000,000 

8,536,910 

14,000,000 

2,771,600 

103 
103 
103 
103 

100 

103 
100 
100 

100 

23 

10 

4 

85 

35 

14 

20 
53 

25 

$ 

$ 
13,592,233 

11,388,345 

27,873,787 

1,893,204 

650,000 

67,397,864 

341,472 

1,484,000 

27,716 

Total     .    .    .    $ 

164,807,910 

124,648,621 

TELEGRAPHS. 


Name. 

Amount  of 
Issue. 

Price. 

Price. 

1876. 

Depreciation. 

W.  India,  &c 

£ 
60,071 

10 

i 

£       ' 
57,068 

BANKS. 


Name. 

Amount  of 
Issue. 

Price. 

Price. 

1876. 

Depreciation. 

Anglo  Hungarian   .     .     . 
Ld.  Mort.  of  India  .     .     . 
Metropolitan  B.      ... 

40,000 

100,000 

9,016 

10 

.    5 

10 

Total  . 

4 

h 
2 

.    £ 

£ 

240,000 
450,000 

72,128 

762,128 

APPENDIX   E. 


219 


MISCELLANEOUS. 


Name. 

Amount  of 
Shares. 

Price. 

Price. 
1876. 

Depreciation. 

India  rubber 

10,000 
40,000 
37,000 
25,000 

30,000 

14,000 
20,000 
17,500 
20,000 
10,000 
10,000 
20,000 
15,000 

25",600 

£ 
50 
50 

1 
10 

20 

10 
10 

9 

5 
10 

5 
10 
10 

io 

TotaL 

£ 
19 

6 

JL 

2^ 

1 

2 

1 

3 

2* 

1 

H 

7 
2 

£ 

£ 
310,000 

Lend.  Fin.  Association 
Ry.  &  Gen.  Light  Imp- 
Upper  Assam 

Birmingham      and  > 
District  Tramway  ) 
Buenos  Ayres  Nat. . .  . 
Lisbon  Stm 

960,000 

28,425 

200,000 

570,000 

112,000 
180,000 

Gen.  Sew.  and  Manure 

Native  Guano 

New  Somb.  Phos . .    . . 
Patent  Gunpowder. . . 
Phospho.    Sewage.  . . . 
Phospho.   Guano 

A.  pref 

Ditto  B.  pref.. 

105,000 
30,000 
80,000 
40,000 

170,000 
45,000 

200,000 

3,030,425 

APPENDIX  E. 


Stored  Bullion  in  Europe, 
There  would  be  great  value  attaching  to  complete  statistics  on 
-this  subject ;  but  not  being  obtainable  from  the  various  Govern- 
ments, the  subject  may  be  left  for  official  statists  who  would 
thus  render  good  service  to  the  public.  A  curious  process  is 
going  on  in  the  Bank  of  France,  which  is  thus  described  : 

"  The  gold  in  five  vaults  in  April,  1875,  exceeded  500  tons  in 
weight — in  other  words,  it  weighs  about  as  much  as  twenty 
locomotive  engines  of  the  first  size.  AVhat  were  the  treasures 
of  Solomon  or  Croesus  to  this  ?  To  trace  the  process  by  which 
this  immense  mass  has,  as  it  were,  gravitated  to  Paris,  would 
be  no  easy  task.  £150,000  weighs  over  a  ton  ;  £75,000,000  would 
therefore  weigh  500  tons."  As  regards  the  Bank  of  Prussia, 
the  bullion  there  is  only  a  portion  of  Government  Treasure, 
as  Bismarck's  Military  Chest  has  to  be  remembered  in  the 
calculation. 


220 


LONDON    BANKING    LITE. 


APPENDIX  F. 

German  Speculations  since  the  War  of  1871-2. 

The  extension  of  German  commerce  supplies  important  infor- 
mation which  has  to  be  carefully  followed.  As  in  the  case  of 
England  after  the  great  French  wars,  a  dangerous  inflation  of 
business  has  been  manifested,  the  trade  investments  have  been 
extensive,  and  something  like  a  crisis  is  already  being  experi- 
enced from  the  reactionary  movements  of  either  the  cautious 
trader  or  the  insolvency  of  those  without  means  in  proportion 
to  their  speculations.  It  is  not  unreasonable  to  expect  further 
disasters,  as  the  internal  resources  of  the  country  are  not  suf- 
ficient to  warrant  extensive  commercial  under takines. 


JOINT  STOCK  COMPAJflES  IN  GERMANY. 


Nature  of  Companies. 


Mines,  Iron,and  Salt ) 
Works   .    .    .    .     j 

Stone  and  Mineral ) 
Industries      .     .     ) 

Metal  Works     .    .    . 

Machin'y  &  Apparatus 

Chemical  Works   . 

Light  and  Heating 

Textile  Industries 

Paper  and  Leather 

Wood  and  Carving    . 

Food  &  Refreshment 

Clothing    .... 

Building   .... 

Art  Dealing  .    . 

General  Trade  .    . 

Commercial  .    .    . 

Various      .... 

Bank  and  Credit   .     . 

R-  R,  Ordinary  Stock 

Ditto  Preference  . 

Total     .    . 


No.  of 
Com- 
panies 


101 

17 

10 
60 
13 

1 
21 
10 

4 
31 

1 
43 

1 

5 
11 

5 

111 

24 

41 


510 


Paid  up 
Capital. 


£ 
26,200,000 

1,127,000 

659,000 

5,651,000 

1,234,000 

300,(100 

2,701,000 

737,000 

234,000 

3,483,0110 

75,000 

8,310.000 

75,000 

720,000 

1,195,000 

533,000 

43,075,000 

73,812,000 

15,545,000 


185,660,000 


Value  at  Market  Prices  of  Securities. 


1872. 


1874. 


£ 
36,390,000 

1,095,000 

788,000 
6,834,000 
1,180,000 

279,000 
2,495,000 

731,000 

251,000 

3,0!:IS,000 

63,000 

8,514,000 

71,000 

789,000 

1,316,1100 

723,000 

65.373,000 

87,909,000 

13,771,000 


231,670,000 


£ 
19,602,000 

■  399,000 

329,000 

3,422,000 

367,000 

180,000 

1,393,000 

432,000 

132,000 

1,812,000 

25,000 

3,227,000 

17,000 

597,0!  10 

898,000 

232,000 

42,102,000 

63,911,000 

10,530,000 


149,607,000 


1875. 


£ 
12,296,000 

240,000 

216,000 

2,733,000 

250,000 

147,000 

1,071,000 

277,000 

82,000 

1,674,000 

11,000 

2,147,000 

3,000 

461,000 

797,000 

120,000 

36,071,000 

57,975.000 

8,230,000 


124,801,000 


APPENDIX   G. 


221 


The  conclusions  to  be  drawn  from  this  remarkable  document 
are  that  mining, — the  worst  of  all  industrial  gambling, — makes 
itself  conspicuous,  and  that  Banking  or  Credit  Companies  have 
been  in  greater  favor  than  their  ultimate  success  has  warranted. 
Germany,  with  all  its  desire  to  be  rich  has,  like  most  countries 
with  newly-acquired  wealth,  failed  to  turn  its  opportunities  to 
good  account. 

APPENDIX  G. 


Turkish  Loans. 

For  years  to  come  there  will  be  .an  increasing  necessity  to  re- 
member the  heavy  experience  obtained  by  investors  in  the 
stocks  of  the  Ottoman  Empire.  The  following  table,  therefore, 
must  have  a  continuous  interest  to  those  who  have  suffered  by 
their  misplaced  confidence  in  the  "sick  man," -the  object  of 
care  and  solicitude  of  the  Allied  powers. 


Date. 

Nature  of  Guarantee. 

Original 
Amount. 

Outstanding. 

1854 
1855 

1858 

1862 

1863 

1865 

1869 

1871 

1872 
(Treasury 
Bonds  ex- 
changeable 
into  5  per 
cents.) 

1873 

General  Debt 
or  5  per  cent. 

Egyptian  tribute 

Eng  and  and  France 

Cusioms  duties  at  Constantinople  . 
j  Revenue  and  salt  duties,  stamps,  1 

(     and  patents ) 

i  Balance  remaining  from  previous  1 

(     hypothecations ) 

Sheep  Tax  and  Syrian  Serghis  .    . 

Various  tithes 

Balance  of   Egyptian  tribute    .    . 
Tithes ,    .    •    . 

£ 
3,00ii,000 
5.000,000 
5,000,000 

8,000,000 

8,000,000 

6,000,000 
22,222,220 

5,700,000 
11,126,200 

27,777,780 

96,593,090 

(35,020,650 
notyetiss'd) 

£ 
1896,500 
3;815,200 
3,589,500 

4,915,900  • 

5,083,400 

4,034,500 

20,650,000 

5,450,630 

6,816,400 

27,201,180 
61,572,440 

(  Ximes,  and  part  of  Sheep  Tax  1 
(     and  of  tobacco  monopoly    .    . 

1  General  Revenue 

198,419,290 

145,025,680 

Mr.  Farley  estimates  the  entire  debt  of  Turkey  at  £202,554,- 
420,  more  than  half  which  sum  has  been  borrowed  in  the  last 
five  years. 


222 


LONDON  BANKING   LIFE. 

APPENDIX  H. 


Emigration 

IN  1875. 

Port  of  Departure. 

United 
States. 

British 

North 

America. 

A-nstra- 
lian 
Colonies. 

All 

other 

Places. 

Total. 

Liverpool 

72,350 
2,692 

14,069 
126 

932 

20,464 

7,413 

2,189 
3,497 

667 

89,640 

26,779 

Plymouth 

8,080 

Total  England  from  ports  at ) 
which  there  are  Emigration  > 
Otlipers .         1 

75,042 
1,135 

14,195 

7 

28,809 
449 

6,353 
9,316 

124,399 

Total  from  all  other  ports 

10,907 

Total  England 

76,177 

14,202 

29,258 

15,669 

135,306 

Glasgow  and  Greenock  (being"] 
the  total  Scotland  from  ports  1 
at  which  there  are  Emigra-  [ 

tion  Oflicers)  J 

Total  from  all  other  ports 

8,492 

1,864 

4,5^1 
28 

180 
11 

15,070 
39 

Total  Scotland 

8,492 

1,861 

4,562 

191 

15,109 

Cork 

16,611 
3,090 

60 
1,022 

703 

•• 

17,374 
4,112 

Lonrlondftrrv        

Total  Ireland  from  ports  at  J 
which    there  are    Emigra^  [ 
tion  Otlicers ) 

Total  from  all  other  ports 

19,701 
676 

1,082 
230 

703 

1,002 

•• 

21,486 
1,908 

Total  Ireland 

20,377 

1,312 

1,705 

.. 

23  394 

Total  from    ports    at  which  J 
there  are  Emigration  Offi- [ 
cers ) 

103,235 
1,811 

17,141 
237 

34,046 
1,479 

6,533 
9,327 

160,955 

Total  from  all  other  ports 

12,854 

Grand  Total  United  Kingdom. 
Total  in  1S74 

105,046 
148,161 

17,378 

25,450 

35.525 

.53,958 

15,860 
13,445 

173,809 

241,014 

Table  showing  the  Origin  of  the   Persons   Comprised 
IN  the  above  Return. 


Not 

Destination. 

English. 

Scotch. 

Irish. 

Foreign. 

Distin- 
guished. 

Total. 

United  States 

43,867 

5,893 

31,433 

23,028 

825 

105,046 

North  American  Co- 

lonies   

9,044 

1,871 

1,391 

5,016 

56 

17,378 

Australian  Colonies.. 

20,749 

5,750 

8,251 

767 

8 

35,525 

All  other  Places 

10,880 

1,172 

374 

2,536 

898 

15,860 

Total 

84,540 

14,686 

41,449 

31,347 

1,787 

173,809 

Total  in  1874 

116,490 

20,286 

60,496 

38,465 

5.277 

241,014 

N.B. — Of  the  total  number  of  passengers  in  1875,  37,865  were  cabin,  and 
135,944  steerage  ;  but  the  returns  do  not  distinguish  between  bona  fide  set- 
tlers and  ordinary  travellers. 


APPENDIX   I.  223 


APPENDIX  I. 


Balance  Sheets  of  Failed  Firms. 

It  has  not  been  practicable  to  furnish  complete  financial  state- 
ments of  all  commercial  houses  "  in  suspense  "  or  passing 
through  bankruptcy.  But  it  is  deemed  desirable  to  publish 
some  of  the  more  important  balance  sheets  which  present,  not 
only  figures  of  remarkable  significance,  but  proofs  of  speculative 
tendencies,  acting  like  beacons  for  the  guidance  of  future  com- 
mercial operations.  It  is,  indeed,  singular  that  more  complete 
information  on  these  subjects,  together  with  statistical  returns 
from  the  Bankruptcy  Court,  is  not  obtainable.  The  Registrar, 
however,  explains  that  "cases  of  stoppage  of  payment,  which 
neither  resulted  in  bankruptcy  nor  insolvency,  nor  were  the 
subjects  of  deeds  of  assignment,  &c.,  are  not  registered  in  this 
court,  and  also  cases  dealt  with  by  the  Court  of  Chancery  un- 
der the  Winding-up  Acts,  cannot  be  followed,  as  no  record  of 
such  cases  exists  in  the  London  Bankruptcy  Court."  In  ex- 
planation of  this  state  of  things  the  remarkable  admission  was 
made  some  time  since  "  that  creditors  had  a  right  to  do  as  they 
liked  with  their  own  !  "  While  this  may  appear  in  the  ab- 
stract incontrovertible,  such  a  statement  could  be  easily  chal- 
lenged  as  to  criminal  offences.  And  is  there  not  often  a  very 
"thin  line  "  between  crimes  and  misfortunes?  At  all  events, 
more  publicity  would  be  beneficial,  and  the  innocent,  the  vic- 
tims of  downward  markets,  those  who  have  been  "  brought  to 
grief  by  no  imprudence  of  their  own,"  would  emerge  from  the 
courts  with  shields  untarnished,  and  reputations  often  improved 
or  made  to  shine  in  the  clear  daylight. 


224 


LONDON  BANKING   LIFE. 


Messrs.  Alexander  Collie  &  Co. — Afproximatb 


Liabilities. 

Creditors  unsecured 

Creditor's  Balances  subject  to  payment 
of  their  acceptances 

Creditors  partly  secured — 

Claim 

Security.     .     .     . 

Creditors  fully  secured — 

Security .... 
Claim 

Surplus  to  Contra.    .    . 

Creditors,  for  Rents,  Rates,  and  Salaries. 
Other  liabilities 

Liabilities  on  Bills  Receivable: 

Amount. 
Drawn  against   Consign- 
ments   £606,286  11    2 

Unsecured  .  £2,260,347  S  9 
/^ess-Credit ) 
balances    \  1,274,292  6  5 
as  above    ) 

986,055    4    4 

£1,592,341  15    6 


S.     d. 


Deduct — 
Cash  and  other  securities  in  hands  of 
holders  of  Bills 


Total     . 


42,788    8    0 
22,248    2  10 


107,386    3  11 
165,036    3  11 


32,350    0    0 


Estimated  to 

Rank 
60,000    0    0 


430,849  19    5 


480,849  19    5 


16,270  10  11 


.     £ 


£     s.    d. 
90,027    7    2 

1,274,292    5    5 


20,540    5    2 


927    9  11. 
39,118  14    7 


464,579    8    6 


1,889,785  10    9 


APPENDIX   I. 


225 


Statement  of  Affairs  on  the  2nd  of  July,  1876. 


Estimated   to 
Eealize. 

Assets. 

Cash  at  Bankers  and  retained  against 
Bills  Discoiuited 

£      s.   d. 
11,406  10  11 

£      s.   d. 

Cash  in  hand 

Bills  Receivable  in  hand 

Debtors,  good 

Stock  in  Warehouse, &c 

Stocks  and  Shares  and  Sundry  Assets.    . 

Freehold  premises,  Aj-touu  Street,  esti- 
mated surplus  after  payment  of  balance 
of  purchase-money 

Separate  Estates. 

Alexander  Collie,  estimated  surplus    .     . 
William  Collie,  estimated  surplus   .    .    . 

15,295  18  10 

60,000    0    0 
15,000    0    0 

1,148  16    3 
7,500    0    0 

12,775  12    7 
48,607  18    3 
30,510    0    0 

75,000    0   0 
75,000    0    0 

.     .     .     £ 

4 

32,350    0    0 

10,000    0    0 
71,000    0    0 
38,500    0    0 

100,000    0    0 
300,000    0    0 

Total 

250,542    7    1 

Assets  requiring  time  for  realization  :— 
Estimated  sui-plus  from  Creditors  fully 

secured 

Bad  Debts  £223,198  Os.  M.,  estimated 

to  realize 

Carolina  Cotton  Warrants 

Ventures  accounts :  subject  to  adjust- 
ment 

Balance  of  the  several  accounts  £146,540 
19.S.  4fZ 

Judgment  recovered  against  the  U.  S. 
Government,  subject  to  Appeal  and 
subject  to  law  charges  and  expenses, 
about  £190,000,  of  which  it  is  esti- 
mated wiU  belong  to  this  Estate    .     . 

Further  amoimts  to  be  recovered,  esti- 
mated at 

£551,850   0   0 

15 


226 


LONDON  BANKING  LIFE. 


Messrs.  N.  Alexander,  Son  &  Co.— Statement  of 


LlABHilTIES. 


s.  d. 


Acceptances  to  drafts  of  A.  Collie  &  Co.  in 
respect  of  goods.  &c.,  under  drawers'  con- 
trol    251,705  15    0 

Less 
Property  in  the  hands  of  holders  claimed  by 
them. 11,984  17    4 


s.  d. 


£     s.  d. 

6,000  Bombay  B.  RaU 5,700    0  0* 

112  Shares  in  A.  &  Co 6,400    0  0* 

Property  of  Mr.  A 480    0  0 

12,580    0  0 

Less  on  overdft,  of  N.  Alexander    .       699  13  9 


Other  Creditors. 


Total 


11,880    6    3 
104  11    It 

£11,984  17    4 


239,720  17    8 


814    6  li 


£    240,535    4    7 


*Co.  claim.  t  At  Bank  of  E. 

Note.— There  is  a  question  as  to  the  right  of  the  Creditors  holding  these 
Securities  to  retain  certain  of  them. 


APPENDIX   I. 


227 


Assets  an©  Liabilities  on  the  18th  of  Juue,  1875. 


Assets. 
Cash  at  Bankers 

Stock,   Shares,  and  Debentures.    City  of  London  and 
Bombay  Rail 

Indigo  Warrants 

Private  Estates : — 

Surplus  from  the  Estate  of  N.  Alexander.    .... 

£5,600  real  Estate  at  Epsom. 
2,400  Ireland  Estate. 
2,060  Under  Mar.  Bett.  L.  T.  &  S.  Rail. 
2  320 ) 
1*200  }  Sundries— Shares. 

127) 
1,432  Furniture. 

200  Cash. 
1,010  Rentcharge. 

300  Tradesmen. 

B.  H.  Pearse 

£1,700  Univ.  Marine. 
500  Saccharine  Co. 
250  Policy  in  addition. 

Claim  against  A.  Collie  &  Co. — 

£      s.  d. 
Amount  due  on  Loan  and  Current  Account  4,367  13    4 
Amount  due  on  Joint  Account  with  J.  Mul- 
hoUand 987  10    5 

£5,355    3    9 

To  proportion  of  Surplus  of  Alexander  Collie's  Private 
Estate,  estimated  by  Messrs.  Collie  at  £60,000. 

Total £ 


£  s.  d. 

1,348  1    1 

13,840  0    0 

1,800  0    0 

15,066  3  11 


2,200    0    0 


34,254    8    0 


228 


LONDON   BANKING   LIFE. 


Messrs  Hat,  Ingkam,  &  Co. — Stateihent  of  the 


Liabilities. 
Unsecured  Creditors 

£       $. 
69,272    5 

9,206  11 
29,335    0 

63  14 

101  16 

d. 

a 

£       s. 
Creditors  fuUy  secured 10,821    7 

Less  Estimated  value  of  Securities   .     .    .    11,096    7 

d. 
3 

3 

Surplus  to  contra   .    .      £275    0 

0 

Creditors  partly  secured 18,184  17 

Estimated  value  of  Securities 8,978    6 

6 
0 

6 

n 

Other  Liabilities ■  .    .    - 

Creditors,  for  Rent,  Rates,  Taxes,  and  Wages     .    .    . 

Liabilities  on  Bills  Discounted  £101  16s.  3d.  of  which 
is  expected  will  rank  against  the  Estate  for  dividend 

it 
£ 

0 
3 

Total 

107,979    7 

3 

APPENDIX  I. 


229 


Affairs  on  the  25th  of  March,  1875. 

Assets. 
Stock-in-Trade  at    .    .    .    estimated  at 

Book  Debts  about  £  ....  estimated  to  produce.    . 

Cash  in  hand 

Bills  of  Exchange,  or  other  similar  Securities,  estimated 
to  produce 

Furniture,  Fixtures,  and  Fittmgs  at    .    .    .    estimated 
to  produce    

Property i     .     . 

Surplus  from  Securities  in  the  hands  of  Creditors  fully 
secured,  see  contra 

Total £ 


£   s.  d. 


20    0    0 


77    0    0 


743  18    0 


275    0    0 


1,115  18    0 


230 


LONDON   BANKING  LIFE. 


Messrs.  Gilead  A.  Smith  &  Co.— Approximate 


Liabilities.  £       s.   d. 

Creditors  tmsecured 40,569    0    8 

Ditto  under  £10 17    5    2 

Creditors  fully  secured 226,212  17    7 

Value  of  Security 244,183    8  10 

Surplus  to  contra 17,970  11    3 

Creditors  partly  secured 76,200    0    0 

Value  of  Security 37,345    0    0 

Creditors  holding  Bills  for  which  Se- 
curity was  purported  to  have  been 
given 

Other  Liabilities — 
On  Bills  payable  against  Securities  de- 
posited with  third  parties  not  expect- 
ed to  rank  against  the  Estate    .     .    .    £48,450    0    0 

On  Bills  payable  without  Securities 
being  deposited,  but  which  are  not 
expected  to  rank  against  the  Estate.     £9,800    0    0 

On  Bills  payable  drawn  by  the  Aber- 
dare  and  Plymouth  Iron  Companies 
for  their  accommodation 


On  Sundries,  principally  BiUs  dis- 
comited,  none  of  which  are  expected 
to  rank  against  the  Estate    ....    £65,450    0    0 

In  respect  of  Debts  of  the  Vacuum 
Brake  Company,  Limited,  guaran- 
teed .     .     .     .         £1,125    0    7 

Not  expected  to  rank  for  more  than 

Creditors  for  Rents,  Rates,  Taxes, 
Salaries,  &c.,  payable  in  full,  per 
contra ^424    3    8 

Total £ 


s.   d. 


40,586    5  10 


38,855    0    0 


37,565  15    1 


67,901   3    4 


261    5    0 


185,169    9    3 


APPENDIX  I. 


231 


Statement  of  Affairs,  on  the  2nd  of  July,  1875. 

Assets. 

Book  Debts,  estimated  to  realize 

Cash  at  New  York 

Bills  of  Exchange 

Furniture,  Fixtures,  and  Fittings  at  23,  Change  Alley, 
estimated  to  realize 

Surplus  from  Securities  in  the  hands  of  Creditors  fully 
secured,  but  which  may  be  claimed  as  hypothecated. . 

Deduct — 

Creditors  for  Rents,  Rates,  &c.,  payable  in  full    . 


Total £        20,212    0    4 


£       s.  d. 

1,985  12  9 

180    0  0 

500    0  0 

17,970  11  3 


£20,636    4    0 
424    3    8 


232  LONDON   BANKING   LIFE. 

Messrs.  Lambert  Brothers  &  Scott.— Statement  of 


Liabilities.  £       s.    d. 

Creditors  unsecured — 
Above  £10— 

85  Gracecliurch  Street 

On  Acceptances 51,468  10    2 

On  Open  Accounts 55,867    3    2 

Coal  Exchange 5,635    6    7 

Inland  Coal  Account 1,851    2    0 

Rochester 325    6    4 

Port  Said 4,643  10  10 

Under  £10— 

85  Green  church  Street 81  15    3 

Coal  Exchange 40    y    6 

Inland  Coal  Account 32    7    4 

Rochester 37    6    9 

Port  Said 788 

Creditors  fullv  secured — 

Value  of"  Securities 28,550    0    0 

Less  claims 23,262  14    3 

Surplus  to  contra £5,287    5    9 

Liabilities 58,798    5    6 

Expected  to  rank 

Creditors — 

For  Rent,  Rates,  Taxes  and  Wages— 

85  Gracex'hurch  Street 270    8    1 

Coal  Exchange 194    1    0 

Inland  Coal  Account 19  16    8 

Rochester 74  15    0 

Liabilities  on  Bills  discounted — 

85  Gracechurch  Street 108,059    8    4 

Port  Said 11,943    8  10 

120,002  17    2 

Expected  to  rank 14,567    3    2 

Less  Balance  at  Bank 178    8  11 


Lambert  Bros.  &  Hart,  Deptford — 
Liabilities  not  expected  to  rank 


£  £1,364  14    4 


s.    d. 


119,990    6    7 


Total £ 


35,910    5    6 


559    0    9 


14,388  14    3 


170,848    7    1 


APPENDIX   I. 
Affairs  on  the  2'2n6.  of  July,  1875. 


233 


Assets. 

Stock-in-Trad  e — 
85  Gracecluireh  Street. 
Coal  Exchange     .    .    . 
Inland  Coal  Account    . 

Rochester 

Port  Said 


Book  Debts — 
85  Gracechurch    Street 

Estimated  to  produce 
Coal  Exchange    .    .    . 

Estimated  to  produce 
Inland  Coal  Account    . 

Estimated  to  produce 
Rochester    .    ■     .    .    . 

Estimated  to  produce 

Port  Said 

'   Estimated  to  produce 


Cash  in  hand — 
Bank  of  England 
Barclay  &  Co.    . 


Held  against  Bills  under  discount— 
85  Gracechurch    Street    . 

Rochester .    . 

Port  Said    ....  .    . 

Bills  of  Exchange — 
In  hand,  85,  Gracechurch  Street  . 


Furniture,  Fixtures  and  Fitthigs — 
85  Gracechurch  Street.    .    .    . 

Rochester 

Port  Said    ........ 


Property — 
85  Gracechurch  Street 
Coal  Exchange    .    .    . 

Rochester 

Port  Said 


s.   d. 


16,3.31  3  9 

2<J1  13  2 

18  14  6 

200  0  0 

4,323  0  0 


45,210  11  11 
'  7,445  12    G 


4,(505    1    4 

10,812    5    1 

2,344    0    0 


s.    d. 


21,134  11  5 

31,759    9  9 

0,094  16  8 

4,615    4  0 

3,733    7  0 

2,344    0  0 


Surplus  from  Securities  held  by  Credit- 
ors, per  contra    ......... 

Lambert  Bros.  &  Hart,  Deptford    .     .     . 

Siu'iilus  from  Private  Estates  of  Partncrs- 

F.  D.  Lambert 

R.  J.  Lambert 


3    7 
178    5    4 


178    8  11 


i;'.2  12    6 

30  14    6 

7  10    0 


250  0  0 
150  0  0 
220    0    0 


7,076  13  4 

26  6  3 

784  0  0 

9,2!)4  0  0 


1,265  10    6 
61    7    3 


Total 


170  17    0 
1,187  13    3 


620    0    0 


17,180  19    7 

5,287    5    9 
541     8    2 


1,326  17    9 


95,i)96  10    4 


234 


LONDON  BANKING  LIFE. 


Messrs.  Shaw  &  Thomson. — Approximatb 


Liabilities. 

Bills  Payable,  unsecured 

Creditors  fully  secured — 
Estimated  value  of  Securities    .    .    . 

£       s.  d. 

■        •        • 

79,281  10    8 
88,325    3    4 

£  s.  d. 
67,088    9    6 

Surplus  to  contra 

9,043  12    8 

Creditors  partly  secured — 
Estimated  value  of  Securities    .    .    . 

18,647  19    8 
5,745    0    0 

Creditors  on  open  Account 

Liabilities  on  Bills  Receivable  discount- 
ed     

•  •        • 

95,322  15  11 

•  •        • 

•  •        • 

12,902  10  8 
10,656  19    1 

Expected  to  prove 

12,528  14  3 

Total    .    .    . 

103,177    2    5 

APPENDIX  I. 


235 


Statement  of  Affahis  on  the  7th  of  August,  1875. 


Assets. 


OflBoe  Furniture,  estimated  at    . 


Interest  in  the  Moor  Iron  Works,  Stock- 
ton-on-Tees   


Book  Debts — 
Good    .    . 
Doubtful  . 
Bad      .    . 


Estimated  to  produce 


Surplus  from  Securities  in  the  hands  of 
Creditors,  per  contra 

Shares  and  Stock  in  Joint-Stock  Com- 
panies   

Total    .    .    . 

North  of  England  Iron  Companj',  Balance 
due  at  Alexandria £ 


s.  d. 


1,044    3  1 

17,985  12    4 

4,027  10    5 


23,057    5  10 


s.   d. 


250    0    0 


18,180    0    0 


15,510    7    5 


7,039    2    7 


9,043  12    8 


2,340    0    0 


36,852  15    3 


236 


LONDON   BANKING   LIFE. 


Messrs.  Edmund  Jones  &  Co. — Approximate 


Liabilities. 
Creditors  unsecured-'.     .     . 


Liability  on  Acceptances  in  favor  of  A. 
Collie  &  Co 

Less  Cash  held  against  same  .... 

Liability  on  Bills  Receivable  under  dis- 
count     

'Liability  on  acceptances  in  favor  of  third 
parties 

Of  which  will  rank  against  this  Es- 
tate     

Creditors  holding  Security — 
Union  Bauk  of  London.    .  £7,158    9    0 
Less  Cash  held  by  them   .        750    0    0 


Lien  on  Goods  sold  to  Edmund  Jones  & 
Co.,  Rangoon,  deducted  as  per  contra  . 


£      s.   d. 

95,400    4    6 
19  10    G 


2,348    2    0 


2,726  11    9 


6,408    9    2 


6,403    9    2 


Total 


£      s.   d. 
6,716    2    0 


95,380  14    0 


801  11    9 


£     102,898    7    9 


APPENDIX  I. 


237 


Statement  of  Affaies  on  the  18th  of  August,  1875. 


Assets. 

*  Debt  due  from  Edmund  Jones  &  Co., 
of  Rangoon 

Less,  Lien  thereon,  as  per  contra.    .    . 

Sundry  Debtors,  £4,907  15    2,  estimated 
value 

Goodsat  Packers',  at  oost 

Less  lien  thereon 

Cash  in  hand 

Cash  at  Bankers,  retained  as  per  contra  . 

Bills  Receivable  in  hand 

Office  Furniture 


£      s.   d. 

55,811  14    7 
6,408    9    2 


53    3    8 

24  18    8 


769  10    6 


Share  in  North  China  Insurance  Com- 
pany  


Less  Lien  of  Office  thereon . 


Total 


173    0    0 
22    0    9 


s.    d. 


49,403    5    5 

4,116    2    7 


28    5    0 
1  13    8 


385    0    0 
150    0    0 


150  19    3 


£    54,2.35    5  11 


*  The  value  of  this  Asset  cannot  he  estimated  until  the  position  of  E. 
Jones  &  Co.,  of  Bangoon,  has  been  ascertained. 


238 


LONDON  BANKING  LIFE. 


Messrs.  Da  Costa,  Raaxte  &  Co., 

Statement 

LlABUilTTFS. 

£       s. 

d. 

Creditors  unsecured 

72,531  18 

A 

Creditors  fully  secured — 

Securities 

£       s. 

.   28,242    2 
.   24,553    6 

d. 

1 

5 

Claims 

Surplus  to  contra    . 

3,688  15 

8 

Creditors  partly  secured — 

Claims 

.  30,963    1 
.  16,800    0 

3 
0 

14,163    1 

Securities 

3 

Other  Liabilities — 

On  Acceptances 

"  Guarantees 

.     4,655    4 
.  40,000    0 

6 
0 

44,655    4 

6 

Liabilities  on  Bills  discounted  .... 

,  123,619  11 

3 

Expected  to  rank 

Less  Balances,  &c 

.     7,000    0 
.     2,769  13 

0 
6 

4,230    6 

6 

Amount  standing  to  Credit  of  Behrend 

Brotliers,  of  Alexandria 131,509  14 

1 

Total     . 

.... 

£ 

135,580  10 

7 

APPENDIX  I. 


239 


of  Affairs  on  tbe  2nd  of  August,  1876. 


Assets. 

Property — 

Egyptian  Treasury  Bonds    . 
''        Loan 


£       s.    d. 
34,626    9    0 
15,250    0    0 


Claimed  by  Behrend  Brothers,  Alexandria — 

Bonds  and  Shares 

Sundry  Goods 


Cash  Balances 

Bills  Receivable  in  hand 7,624  18    3 

Estimated  to  produce 

Furniture  in  London  and  Manchester  Ofl3ces  .... 
Book  Debts 19,439  18    4 

Estimated  to  produce 

Surplus  from  Securities,  per  contra 

Deduct  Creditors,  to  be  paid  in  full 

Total d 


s.  d. 


49,876  9  0 


8,480  8  6 
11,105  13  11 

2,041  13  4 


6,383  16  3 

800  0  0 

3,036  1  4 

3,688  15  8 


85,412  17  11 


113  10  3 


85,299  7  8 


240 


LONDON   BANKING   LIFE. 


William  Thomas  Henley. — Statement  of 


Liabilities. 


Unsecured  Creditors 


Creditors  fiiUj' secured 

*  Less  estimated  value  of  Securities . 

Surplus  to  contra   . 


Creditors  partly  secured    .     . 
*Estimated  value  of  Securities 


£  s.  d. 
336,357  5  11 
665,385  17    0 

£329,028  11    1 


115,646  19    6 
90,272  13    5 


Creditors  for  Rent,  Rates,  Taxes,  and  Wages  .... 

Liabilities  on  BiUs  Discounted     .     .     .    £70,854    6    4 

Of  which  it  is  expected  wiU  rank  against  the  Estate 

for  dividend 


Total 


£         s.  d. 
180,670  19    9 


25,374    6    1 


3,861    1    4 


2,500    0    0 


212,406    7    2 


*  Particulars  of  Securities  : 

"Works,  North  "Wool-wich 
"        Poutuewynydd    . 


£       s.  d. 

470,000    0    0 

65,000    0    0 


Partridge,  Jones  &  Co.,  Limited — 

4,896  Shares,  £10  paid,  at  3  dis.  . 

♦  2,500       "  8    "       at  3  "      . 


34,272    0    0 
12,500    0    0 


Orkney  and  Shetland  Islands  Telegraph  Co. 
Cable  Contract       .        .  ... 

1,397  Shares  of  £10  each       .... 


17,000    0    0 
13,970    0    0 


Spanish  Government  Cable  Contracts 


35,680    0    0 


Carried  forward £648,422    0    0 


APPENDIX  I. 


241 


Affaiks  on  the  1st  of  April,  1875. 


Assets. 

Stock-in-Trade  at  Works,  North  Woolwich     .... 

Movable  Plant  and  Tools  at  ditto 

Stock-in-Trade  at  Pontnewyuydd  Works 

Movable  Plant  and  tools  at  ditto 

Estimated  to  produce. 

Book  Debts,  estimated  to  produce 

Cash  in  hand 

Bills  of  Exchange  on  other  similar  Securities,  estimated 

to  produce 

Office  Furniture  and  Fittings  at  110  Fenchurch  Street  . 

Other  Property  and  Assets 

Surplus  from  Securities  in  the  hands  of  Creditors  fully 

secured  ...  .  


Total £ 


£        s.  d. 

99,888  12  1 

30,000    0  0 

16,450  16  3 

3,000    0  0 


149,339    8  4 

24,287    5  7 

272    7  6 

181  19  7 

450    0  0 

16,110    5  3 

329,028  11  1 


519,660  17    4 


Particulars  of  Securities— coM^mwetZ.    Brought  forward  .       •  £648,422  0 

S-S.  "Africa" 45^000  0 

S.S.  "  CaroUne "         .        .        .       .               ....  13,000  0 

S.S- "Uruguay" 4,500  o 

S.S.  "Albion" 3,000  0 

Steel  ingots,  &c 13,033  7 

Property  at  Plaistow 6,512  3 

30  Cottages  at  North  Woolwich 4  400  0 

Sundry 17,790  19 

Total £755,658  10 


Claim  of  Creditors  fully  secured 
Held  by  Creditors  partly  secured 


£       s.  d. 

336,367    5  11 
90,272  13    5 


426,629  19    4 
Surplus £329,028  11    1 


16 


242 


LONDON   BANKING    LIFE. 


John  Strachan. — Approximate  Statement  of  Affairs  on 
the  31st  of  August,  1875. 


Liabilities. 

£       s.  d. 

Unsecured  Creditors 

81,975  15    9 

Creditors    fully  secured 

Less  estimated  value  of  Securities  .    . 

Creditors  partly  secured £23,818  11    1 

Estimated  value  of  Securities    .    .    .         15,371  14    7 

8,446  16    6 
4,281    5  11 

Other  Liabilities 

Creditors  for  Reut,  Rates,  Taxes  and  Wages    .... 

.     .    . 

Liabilities  on  Bills  Discounted 

2,234    3    9 

The  whole  of  which  it  is  expected  tvill  rank  against 
the  Estate  for  dividend    .    .     • 

Total £ 

96,938    1  11 

Assets. 
Stock-in-Trade  estimated  at 

Book  Debts,  about  £3,v)31  6s.  2d.  estimated  to  produce. 

Cash  in  hand 

Bills  of  Exchange  or  other  similar  Securities  estimated 
to  produce 

Furniture,  Fixtures  and  Fittings  at  11,  Arundel  Gardens 
estimated  to  produce 


Property 


Surplus  from  Securities  in  the  hands  of  Creditors  fully 
secured,  see  contra 

Amount  expected  to  be  realized  from  the  Estate  of  A. 
J.  Hinloch 

Total i 


£       s.  d. 
3,563    9    3 


648    1    0 


1,500    0    0 
5,711  10    3 


APPENDIX   I. 


243 


Messrs.  Lawton  &  Head. — Statement  of  Affairs  on  the 
21st  of  December,  1875. 


Liabilities. 


Unsecured  Creditors 


Creditors  fully  secured 32,390    6    7 

Less  estimated  value  of  Securities.     .     .    32,536  10    3 


Surplus  to  contra ^146    3    8 


Creditors  partly  secured  .     . 
Estimated  value  of  Securities 


28,092  18    4 
1,924    7    5 


Other   Liabilities 23,601  17    0 

Creditors  for  Rent,  Rates,  and  Wages 

Liabilities  on  Bills  Discounted    .     .     .    23,492    2    1 

Of  which  it  is  expected  to  rank  against  the  Estate  for 
dividend 

Total :    £. 


s.  d. 


58,736    6    9 


26,168  10  11 

1,201  10  10 
504    3    3 


4,667    1    5 


91,277  13    2 


Assets. 
Stock-in-Trade 

Book  Debts,  about £61,794  18    1 

Estimated  to  produce 

Cash  in  hand 

Bills  of  Exchange  estimated  to  produce 

Furniture,  &c.,  estimated  to  produce 

Property 

Surjilus  from  Securities  in  hand  of  Creditors  fully 
secured,  see  contra 

Surplus  from  separate  Estates — 

B.S.Y.  Lawton £1,125    0    0 

George  Head 377    0    4 


Total 


£       s.  d. 

25,612  IS    0 

192  18  10 

1,233    6    4 

285  10    0 

108    4  10 

146    3    8 
1,502    0    4 


29,081    2    0 


UNIVERSITY  OF  CALIFORNIA  AT  LOS  ANGELES 

THE  UNIVERSITY  LIBRARY 

This  book  is  DUE  on  the  last  date  stamped  below 


Form  L-P 

20m-l, '41(1122) 


UNIVERSITY"  OF  CALIFORNIA 

AT 
LOS  ANGELES 


H6 

186         ^rdy  - 

banking  lif«^ 


DEM  CO  234N 


HG 

186 

G7P9 


*-««««M=^.:4i?is^?|e^.^ 


iM 


